Correlation Between Odfjell Drilling and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Odfjell Drilling and Jacquet Metal 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 Odfjell Drilling and Jacquet Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odfjell Drilling and Jacquet Metal Service, you can compare the effects of market volatilities on Odfjell Drilling and Jacquet Metal 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 Odfjell Drilling with a short position of Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odfjell Drilling and Jacquet Metal.
Diversification Opportunities for Odfjell Drilling and Jacquet Metal
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Odfjell and Jacquet is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell Drilling and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service and Odfjell Drilling 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 Odfjell Drilling are associated (or correlated) with Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Odfjell Drilling i.e., Odfjell Drilling and Jacquet Metal go up and down completely randomly.
Pair Corralation between Odfjell Drilling and Jacquet Metal
Assuming the 90 days trading horizon Odfjell Drilling is expected to generate 0.78 times more return on investment than Jacquet Metal. However, Odfjell Drilling is 1.28 times less risky than Jacquet Metal. It trades about 0.37 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.11 per unit of risk. If you would invest 5,400 in Odfjell Drilling on November 3, 2024 and sell it today you would earn a total of 815.00 from holding Odfjell Drilling or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Odfjell Drilling vs. Jacquet Metal Service
Performance |
| Timeline |
| Odfjell Drilling |
| Jacquet Metal Service |
Odfjell Drilling and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odfjell Drilling and Jacquet Metal
The main advantage of trading using opposite Odfjell Drilling and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell Drilling position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| Odfjell Drilling vs. Alaska Air Group | Odfjell Drilling vs. Gamma Communications PLC | Odfjell Drilling vs. Ryanair Holdings plc | Odfjell Drilling vs. Sealed Air Corp |
| Jacquet Metal vs. Thor Mining PLC | Jacquet Metal vs. Dentsply Sirona | Jacquet Metal vs. iShares Physical Silver | Jacquet Metal vs. Endeavour Mining Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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