Correlation Between San Leon and Battalion Oil

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

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

Diversification Opportunities for San Leon and Battalion Oil

0.0

Correlation Coefficient

San Leon  Battalion Oil

Pay attention - limited upside

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

Pair Corralation between San Leon and Battalion Oil

If you would invest  30.00  in San Leon Energy on October 2, 2024 and sell it today you would earn a total of  0.00  from holding San Leon Energy or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.57%
Values	Daily Returns

San Leon Energy  vs.  Battalion Oil Corp

San Leon Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days San Leon Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, San Leon is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Battalion Oil Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Battalion Oil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with San Leon and Battalion Oil

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

The idea behind San Leon Energy and Battalion Oil 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.