Correlation Between Sentry Petroleum and Spindletop

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

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

Diversification Opportunities for Sentry Petroleum and Spindletop

0.0

Correlation Coefficient

Sentry Petroleum  Spindletop

Pay attention - limited upside

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

Pair Corralation between Sentry Petroleum and Spindletop

If you would invest  200.00  in Spindletop OG on December 27, 2024 and sell it today you would earn a total of  53.00  from holding Spindletop OG or generate 26.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Sentry Petroleum  vs.  Spindletop OG

Sentry Petroleum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sentry Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Sentry Petroleum is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Spindletop OG

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Spindletop OG are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Spindletop exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sentry Petroleum and Spindletop

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

The idea behind Sentry Petroleum and Spindletop OG 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.