Correlation Between San Juan and 1st NRG

Can any of the company-specific risk be diversified away by investing in both San Juan and 1st NRG 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 San Juan and 1st NRG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between San Juan Basin and 1st NRG Corp, you can compare the effects of market volatilities on San Juan and 1st NRG 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 San Juan with a short position of 1st NRG. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Juan and 1st NRG.

Diversification Opportunities for San Juan and 1st NRG

0.0

Correlation Coefficient

San Juan  1st NRG

Pay attention - limited upside

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

Pair Corralation between San Juan and 1st NRG

If you would invest  378.00  in San Juan Basin on December 25, 2024 and sell it today you would earn a total of  173.00  from holding San Juan Basin or generate 45.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

San Juan Basin  vs.  1st NRG Corp

San Juan Basin

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in San Juan Basin are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward-looking indicators, San Juan unveiled solid returns over the last few months and may actually be approaching a breakup point.

1st NRG Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days 1st NRG Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, 1st NRG is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with San Juan and 1st NRG

The main advantage of trading using opposite San Juan and 1st NRG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if San Juan position performs unexpectedly, 1st NRG 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 1st NRG will offset losses from the drop in 1st NRG's long position.

The idea behind San Juan Basin and 1st NRG Corp 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.