Correlation Between Total Helium and Sintana Energy

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

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

Diversification Opportunities for Total Helium and Sintana Energy

-0.04

Correlation Coefficient

Total Helium  Sintana Energy

Good diversification

The 3 months correlation between Total and Sintana is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Total Helium and Sintana Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sintana Energy and Total Helium 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 Total Helium 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 Total Helium i.e., Total Helium and Sintana Energy go up and down completely randomly.

Pair Corralation between Total Helium and Sintana Energy

Assuming the 90 days horizon Total Helium is expected to generate 4.63 times more return on investment than Sintana Energy. However, Total Helium is 4.63 times more volatile than Sintana Energy. It trades about 0.18 of its potential returns per unit of risk. Sintana Energy is currently generating about 0.01 per unit of risk. If you would invest  1.03  in Total Helium on October 11, 2024 and sell it today you would earn a total of  0.42  from holding Total Helium or generate 40.78% return on investment over 90 days.

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

Total Helium  vs.  Sintana Energy

Total Helium

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Total Helium are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Total Helium reported solid returns over the last few months and may actually be approaching a breakup point.

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 nearly stable basic indicators, Sintana Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Total Helium and Sintana Energy

The main advantage of trading using opposite Total Helium and Sintana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Helium 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 Total Helium 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.