Correlation Between Gran Tierra and Sciplay Corp

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

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

Diversification Opportunities for Gran Tierra and Sciplay Corp

0.47

Correlation Coefficient

Gran Tierra  Sciplay Corp

Very weak diversification

The 3 months correlation between Gran and Sciplay is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Gran Tierra Energy and Sciplay Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sciplay Corp and Gran Tierra 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 Gran Tierra Energy are associated (or correlated) with Sciplay Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sciplay Corp has no effect on the direction of Gran Tierra i.e., Gran Tierra and Sciplay Corp go up and down completely randomly.

Pair Corralation between Gran Tierra and Sciplay Corp

Considering the 90-day investment horizon Gran Tierra Energy is expected to generate 1.77 times more return on investment than Sciplay Corp. However, Gran Tierra is 1.77 times more volatile than Sciplay Corp. It trades about 0.1 of its potential returns per unit of risk. Sciplay Corp is currently generating about 0.11 per unit of risk. If you would invest  473.00  in Gran Tierra Energy on January 24, 2024 and sell it today you would earn a total of  329.00  from holding Gran Tierra Energy or generate 69.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	40.29%
Values	Daily Returns

Gran Tierra Energy  vs.  Sciplay Corp

Gran Tierra Energy

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Gran Tierra Energy are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Gran Tierra exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sciplay Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Gran Tierra and Sciplay Corp

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

The idea behind Gran Tierra Energy and Sciplay Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.