Correlation Between AKITA Drilling and British Amer
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and British Amer 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 AKITA Drilling and British Amer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and biOasis Technologies, you can compare the effects of market volatilities on AKITA Drilling and British Amer 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 AKITA Drilling with a short position of British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and British Amer.
Diversification Opportunities for AKITA Drilling and British Amer
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AKITA and British is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and biOasis Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on biOasis Technologies and AKITA 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 AKITA Drilling are associated (or correlated) with British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of biOasis Technologies has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and British Amer go up and down completely randomly.
Pair Corralation between AKITA Drilling and British Amer
Assuming the 90 days trading horizon AKITA Drilling is expected to generate 492.78 times less return on investment than British Amer. But when comparing it to its historical volatility, AKITA Drilling is 119.18 times less risky than British Amer. It trades about 0.07 of its potential returns per unit of risk. biOasis Technologies is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 127.00 in biOasis Technologies on August 30, 2024 and sell it today you would lose (126.50) from holding biOasis Technologies or give up 99.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKITA Drilling vs. biOasis Technologies
Performance |
| Timeline |
| AKITA Drilling |
| biOasis Technologies |
AKITA Drilling and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and British Amer
The main advantage of trading using opposite AKITA Drilling and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, British Amer 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 British Amer will offset losses from the drop in British Amer's long position.| AKITA Drilling vs. Ensign Energy Services | AKITA Drilling vs. Total Energy Services | AKITA Drilling vs. PHX Energy Services | AKITA Drilling vs. Western Energy Services |
| British Amer vs. AKITA Drilling | British Amer vs. 2028 Investment Grade | British Amer vs. Stampede Drilling | British Amer vs. CNJ Capital Investments |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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