Correlation Between San Leon and ShaMaran Petroleum

Can any of the company-specific risk be diversified away by investing in both San Leon and ShaMaran Petroleum 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 ShaMaran Petroleum 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 ShaMaran Petroleum Corp, you can compare the effects of market volatilities on San Leon and ShaMaran Petroleum 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 ShaMaran Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of San Leon and ShaMaran Petroleum.

Diversification Opportunities for San Leon and ShaMaran Petroleum

0.0

Correlation Coefficient

San Leon  ShaMaran Petroleum

Pay attention - limited upside

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

Pair Corralation between San Leon and ShaMaran Petroleum

If you would invest  8.00  in ShaMaran Petroleum Corp on December 2, 2024 and sell it today you would earn a total of  6.00  from holding ShaMaran Petroleum Corp or generate 75.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.85%
Values	Daily Returns

San Leon Energy  vs.  ShaMaran Petroleum Corp

San Leon Energy

Risk-Adjusted Performance

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.

ShaMaran Petroleum Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ShaMaran Petroleum Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ShaMaran Petroleum reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with San Leon and ShaMaran Petroleum

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

The idea behind San Leon Energy and ShaMaran Petroleum 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.