Correlation Between Santa Fe and Cheetah Oil

Can any of the company-specific risk be diversified away by investing in both Santa Fe and Cheetah Oil 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 Santa Fe and Cheetah Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Santa Fe Petroleum and Cheetah Oil Gas, you can compare the effects of market volatilities on Santa Fe and Cheetah Oil 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 Santa Fe with a short position of Cheetah Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santa Fe and Cheetah Oil.

Diversification Opportunities for Santa Fe and Cheetah Oil

0.0

Correlation Coefficient

Santa Fe  Cheetah Oil

Pay attention - limited upside

The 3 months correlation between Santa and Cheetah is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Santa Fe Petroleum and Cheetah Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheetah Oil Gas and Santa Fe 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 Santa Fe Petroleum are associated (or correlated) with Cheetah Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheetah Oil Gas has no effect on the direction of Santa Fe i.e., Santa Fe and Cheetah Oil go up and down completely randomly.

Pair Corralation between Santa Fe and Cheetah Oil

If you would invest  0.01  in Cheetah Oil Gas on October 19, 2024 and sell it today you would earn a total of  0.01  from holding Cheetah Oil Gas or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Santa Fe Petroleum  vs.  Cheetah Oil Gas

Santa Fe Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Santa Fe Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Santa Fe is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Cheetah Oil Gas

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cheetah Oil Gas are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Cheetah Oil reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Santa Fe and Cheetah Oil

The main advantage of trading using opposite Santa Fe and Cheetah Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santa Fe position performs unexpectedly, Cheetah Oil 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 Cheetah Oil will offset losses from the drop in Cheetah Oil's long position.

The idea behind Santa Fe Petroleum and Cheetah Oil Gas 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .