Correlation Between Strat Petroleum and Sintana Energy

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

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

Diversification Opportunities for Strat Petroleum and Sintana Energy

0.0

Correlation Coefficient

Strat Petroleum  Sintana Energy

Pay attention - limited upside

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

Pair Corralation between Strat Petroleum and Sintana Energy

If you would invest  71.00  in Sintana Energy on October 6, 2024 and sell it today you would earn a total of  3.00  from holding Sintana Energy or generate 4.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.62%
Values	Daily Returns

Strat Petroleum  vs.  Sintana Energy

Strat Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strat Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Strat Petroleum is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Sintana Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sintana Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Strat Petroleum and Sintana Energy

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

The idea behind Strat Petroleum and Sintana Energy 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.

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.