Correlation Between AKITA Drilling and Liberty Northwest
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and Liberty Northwest 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 Liberty Northwest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and Liberty Northwest Bancorp, you can compare the effects of market volatilities on AKITA Drilling and Liberty Northwest 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 Liberty Northwest. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Liberty Northwest.
Diversification Opportunities for AKITA Drilling and Liberty Northwest
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between AKITA and Liberty is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Liberty Northwest Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Northwest Bancorp 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 Liberty Northwest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Northwest Bancorp has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and Liberty Northwest go up and down completely randomly.
Pair Corralation between AKITA Drilling and Liberty Northwest
Assuming the 90 days horizon AKITA Drilling is expected to under-perform the Liberty Northwest. But the pink sheet apears to be less risky and, when comparing its historical volatility, AKITA Drilling is 1.42 times less risky than Liberty Northwest. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Liberty Northwest Bancorp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 549.00 in Liberty Northwest Bancorp on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Liberty Northwest Bancorp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
AKITA Drilling vs. Liberty Northwest Bancorp
Performance |
| Timeline |
| AKITA Drilling |
| Liberty Northwest Bancorp |
AKITA Drilling and Liberty Northwest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and Liberty Northwest
The main advantage of trading using opposite AKITA Drilling and Liberty Northwest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, Liberty Northwest 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 Liberty Northwest will offset losses from the drop in Liberty Northwest'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 |
| Liberty Northwest vs. Ballys Corp | Liberty Northwest vs. Tyson Foods | Liberty Northwest vs. Cementos Pacasmayo SAA | Liberty Northwest vs. Parker Hannifin |
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 Directory module to find actively traded commodities issued by global exchanges.
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