Correlation Between Odfjell Drilling and Celebrus Technologies
Can any of the company-specific risk be diversified away by investing in both Odfjell Drilling and Celebrus Technologies 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 Celebrus Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odfjell Drilling and Celebrus Technologies plc, you can compare the effects of market volatilities on Odfjell Drilling and Celebrus Technologies 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 Celebrus Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odfjell Drilling and Celebrus Technologies.
Diversification Opportunities for Odfjell Drilling and Celebrus Technologies
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Odfjell and Celebrus is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell Drilling and Celebrus Technologies plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celebrus Technologies plc 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 Celebrus Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celebrus Technologies plc has no effect on the direction of Odfjell Drilling i.e., Odfjell Drilling and Celebrus Technologies go up and down completely randomly.
Pair Corralation between Odfjell Drilling and Celebrus Technologies
Assuming the 90 days trading horizon Odfjell Drilling is expected to under-perform the Celebrus Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Odfjell Drilling is 1.32 times less risky than Celebrus Technologies. The stock trades about -0.07 of its potential returns per unit of risk. The Celebrus Technologies plc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 27,500 in Celebrus Technologies plc on September 2, 2024 and sell it today you would earn a total of 2,750 from holding Celebrus Technologies plc or generate 10.0% 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. Celebrus Technologies plc
Performance |
| Timeline |
| Odfjell Drilling |
| Celebrus Technologies plc |
Odfjell Drilling and Celebrus Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odfjell Drilling and Celebrus Technologies
The main advantage of trading using opposite Odfjell Drilling and Celebrus Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell Drilling position performs unexpectedly, Celebrus Technologies 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 Celebrus Technologies will offset losses from the drop in Celebrus Technologies' long position.| Odfjell Drilling vs. Uniper SE | Odfjell Drilling vs. Mulberry Group PLC | Odfjell Drilling vs. London Security Plc | Odfjell Drilling vs. Triad Group PLC |
| Celebrus Technologies vs. GB Group plc | Celebrus Technologies vs. Dotdigital Group Plc | Celebrus Technologies vs. Tracsis Plc | Celebrus Technologies vs. Microlise Group PLC |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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