Correlation Between AKITA Drilling and Hesai Group
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and Hesai Group 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 Hesai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and Hesai Group American, you can compare the effects of market volatilities on AKITA Drilling and Hesai Group 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 Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Hesai Group.
Diversification Opportunities for AKITA Drilling and Hesai Group
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between AKITA and Hesai is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American 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 Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and Hesai Group go up and down completely randomly.
Pair Corralation between AKITA Drilling and Hesai Group
Assuming the 90 days horizon AKITA Drilling is expected to generate 6.44 times less return on investment than Hesai Group. But when comparing it to its historical volatility, AKITA Drilling is 4.74 times less risky than Hesai Group. It trades about 0.19 of its potential returns per unit of risk. Hesai Group American is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,105 in Hesai Group American on October 20, 2024 and sell it today you would earn a total of 454.00 from holding Hesai Group American or generate 41.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AKITA Drilling vs. Hesai Group American
Performance |
| Timeline |
| AKITA Drilling |
| Hesai Group American |
AKITA Drilling and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and Hesai Group
The main advantage of trading using opposite AKITA Drilling and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, Hesai Group 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 Hesai Group will offset losses from the drop in Hesai Group's long position.| AKITA Drilling vs. Cathedral Energy Services | AKITA Drilling vs. Vantage Drilling International | AKITA Drilling vs. Seadrill Limited | AKITA Drilling vs. Noble plc |
| Hesai Group vs. Cabo Drilling Corp | Hesai Group vs. Nabors Industries | Hesai Group vs. AKITA Drilling | Hesai Group vs. Awilco Drilling 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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