Correlation Between Brookside Energy and Sintana Energy

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

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

Diversification Opportunities for Brookside Energy and Sintana Energy

-0.24

Correlation Coefficient

Brookside Energy  Sintana Energy

Very good diversification

The 3 months correlation between Brookside and Sintana is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Brookside Energy and Sintana Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sintana Energy and Brookside Energy 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 Brookside Energy 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 Brookside Energy i.e., Brookside Energy and Sintana Energy go up and down completely randomly.

Pair Corralation between Brookside Energy and Sintana Energy

Assuming the 90 days horizon Brookside Energy is expected to generate 48.04 times more return on investment than Sintana Energy. However, Brookside Energy is 48.04 times more volatile than Sintana Energy. It trades about 0.2 of its potential returns per unit of risk. Sintana Energy is currently generating about 0.01 per unit of risk. If you would invest  1.22  in Brookside Energy on September 22, 2024 and sell it today you would earn a total of  31.78  from holding Brookside Energy or generate 2604.92% return on investment over 90 days.

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

Brookside Energy  vs.  Sintana Energy

Brookside Energy

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brookside Energy are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Brookside Energy 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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Brookside Energy and Sintana Energy

The main advantage of trading using opposite Brookside Energy and Sintana Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brookside Energy 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 Brookside Energy 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..