Correlation Between Stamper Oil and Invictus Energy

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

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

Diversification Opportunities for Stamper Oil and Invictus Energy

0.13

Correlation Coefficient

Stamper Oil  Invictus Energy

Average diversification

The 3 months correlation between Stamper and Invictus is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Stamper Oil Gas and Invictus Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invictus Energy and Stamper Oil 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 Stamper Oil Gas are associated (or correlated) with Invictus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invictus Energy has no effect on the direction of Stamper Oil i.e., Stamper Oil and Invictus Energy go up and down completely randomly.

Pair Corralation between Stamper Oil and Invictus Energy

Assuming the 90 days horizon Stamper Oil Gas is expected to under-perform the Invictus Energy. In addition to that, Stamper Oil is 1.9 times more volatile than Invictus Energy Limited. It trades about -0.01 of its total potential returns per unit of risk. Invictus Energy Limited is currently generating about 0.02 per unit of volatility. If you would invest  4.70  in Invictus Energy Limited on December 10, 2024 and sell it today you would lose (0.90) from holding Invictus Energy Limited or give up 19.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Stamper Oil Gas  vs.  Invictus Energy Limited

Stamper Oil Gas

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stamper Oil Gas are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Stamper Oil may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Invictus Energy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Invictus Energy Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Invictus Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stamper Oil and Invictus Energy

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

The idea behind Stamper Oil Gas and Invictus Energy Limited 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 Transaction History module to view history of all your transactions and understand their impact on performance.