Correlation Between AKITA Drilling and Marine Bancorp
Can any of the company-specific risk be diversified away by investing in both AKITA Drilling and Marine Bancorp 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 Marine Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AKITA Drilling and Marine Bancorp of, you can compare the effects of market volatilities on AKITA Drilling and Marine Bancorp 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 Marine Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AKITA Drilling and Marine Bancorp.
Diversification Opportunities for AKITA Drilling and Marine Bancorp
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AKITA and Marine is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding AKITA Drilling and Marine Bancorp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine 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 Marine Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Bancorp has no effect on the direction of AKITA Drilling i.e., AKITA Drilling and Marine Bancorp go up and down completely randomly.
Pair Corralation between AKITA Drilling and Marine Bancorp
Assuming the 90 days horizon AKITA Drilling is expected to generate 5.45 times more return on investment than Marine Bancorp. However, AKITA Drilling is 5.45 times more volatile than Marine Bancorp of. It trades about 0.15 of its potential returns per unit of risk. Marine Bancorp of is currently generating about 0.02 per unit of risk. If you would invest 115.00 in AKITA Drilling on October 24, 2024 and sell it today you would earn a total of 5.00 from holding AKITA Drilling or generate 4.35% 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. Marine Bancorp of
Performance |
| Timeline |
| AKITA Drilling |
| Marine Bancorp |
AKITA Drilling and Marine Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AKITA Drilling and Marine Bancorp
The main advantage of trading using opposite AKITA Drilling and Marine Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AKITA Drilling position performs unexpectedly, Marine Bancorp 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 Marine Bancorp will offset losses from the drop in Marine Bancorp'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 |
| Marine Bancorp vs. Chester Mining | Marine Bancorp vs. Mangazeya Mining | Marine Bancorp vs. AKITA Drilling | Marine Bancorp vs. Sable Offshore 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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