Correlation Between ShaMaran Petroleum and Senzime AB

Can any of the company-specific risk be diversified away by investing in both ShaMaran Petroleum and Senzime AB 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 ShaMaran Petroleum and Senzime AB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ShaMaran Petroleum Corp and Senzime AB, you can compare the effects of market volatilities on ShaMaran Petroleum and Senzime AB 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 ShaMaran Petroleum with a short position of Senzime AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of ShaMaran Petroleum and Senzime AB.

Diversification Opportunities for ShaMaran Petroleum and Senzime AB

-0.71

Correlation Coefficient

ShaMaran Petroleum  Senzime AB

Pay attention - limited upside

The 3 months correlation between ShaMaran and Senzime is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding ShaMaran Petroleum Corp and Senzime AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senzime AB and ShaMaran Petroleum 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 ShaMaran Petroleum Corp are associated (or correlated) with Senzime AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senzime AB has no effect on the direction of ShaMaran Petroleum i.e., ShaMaran Petroleum and Senzime AB go up and down completely randomly.

Pair Corralation between ShaMaran Petroleum and Senzime AB

Assuming the 90 days trading horizon ShaMaran Petroleum is expected to generate 1.21 times less return on investment than Senzime AB. In addition to that, ShaMaran Petroleum is 1.06 times more volatile than Senzime AB. It trades about 0.03 of its total potential returns per unit of risk. Senzime AB is currently generating about 0.04 per unit of volatility. If you would invest  571.00  in Senzime AB on September 23, 2024 and sell it today you would earn a total of  9.00  from holding Senzime AB or generate 1.58% return on investment over 90 days.

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

ShaMaran Petroleum Corp  vs.  Senzime AB

ShaMaran Petroleum Corp

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ShaMaran Petroleum Corp are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak primary indicators, ShaMaran Petroleum unveiled solid returns over the last few months and may actually be approaching a breakup point.

Senzime AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Senzime AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Senzime AB is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ShaMaran Petroleum and Senzime AB

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

The idea behind ShaMaran Petroleum Corp and Senzime AB 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.