Correlation Between Santa Fe and Sintana Energy

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

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

Diversification Opportunities for Santa Fe and Sintana Energy

0.0

Correlation Coefficient

Santa Fe  Sintana Energy

Pay attention - limited upside

The 3 months correlation between Santa and Sintana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Santa Fe Petroleum and Sintana Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sintana Energy and Santa Fe 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 Santa Fe 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 Santa Fe i.e., Santa Fe and Sintana Energy go up and down completely randomly.

Pair Corralation between Santa Fe and Sintana Energy

If you would invest  0.01  in Santa Fe Petroleum on October 1, 2024 and sell it today you would earn a total of  0.00  from holding Santa Fe Petroleum or generate 0.0% return on investment over 90 days.

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

Santa Fe Petroleum  vs.  Sintana Energy

Santa Fe Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Santa Fe Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Santa Fe is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

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 fragile 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 Santa Fe and Sintana Energy

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

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.