Correlation Between Sintana Energy and Valeura Energy

Can any of the company-specific risk be diversified away by investing in both Sintana Energy and Valeura Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sintana Energy and Valeura Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sintana Energy and Valeura Energy, you can compare the effects of market volatilities on Sintana Energy and Valeura Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sintana Energy with a short position of Valeura Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sintana Energy and Valeura Energy.

Diversification Opportunities for Sintana Energy and Valeura Energy

-0.48

Correlation Coefficient

Sintana Energy  Valeura Energy

Very good diversification

The 3 months correlation between Sintana and Valeura is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sintana Energy and Valeura Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Valeura Energy and Sintana Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sintana Energy are associated (or correlated) with Valeura Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Valeura Energy has no effect on the direction of Sintana Energy i.e., Sintana Energy and Valeura Energy go up and down completely randomly.

Pair Corralation between Sintana Energy and Valeura Energy

Assuming the 90 days horizon Sintana Energy is expected to under-perform the Valeura Energy. In addition to that, Sintana Energy is 1.63 times more volatile than Valeura Energy. It trades about -0.21 of its total potential returns per unit of risk. Valeura Energy is currently generating about 0.12 per unit of volatility. If you would invest  476.00  in Valeura Energy on December 29, 2024 and sell it today you would earn a total of  108.00  from holding Valeura Energy or generate 22.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sintana Energy  vs.  Valeura Energy

Sintana Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sintana Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Valeura Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Valeura Energy are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Valeura Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sintana Energy and Valeura Energy

The main advantage of trading using opposite Sintana Energy and Valeura Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sintana Energy position performs unexpectedly, Valeura Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Valeura Energy will offset losses from the drop in Valeura Energy's long position.

The idea behind Sintana Energy and Valeura Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.