Correlation Between Alternus Energy and Shelf Drilling
Can any of the company-specific risk be diversified away by investing in both Alternus Energy and Shelf Drilling 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 Alternus Energy and Shelf Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternus Energy Group and Shelf Drilling, you can compare the effects of market volatilities on Alternus Energy and Shelf Drilling 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 Alternus Energy with a short position of Shelf Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternus Energy and Shelf Drilling.
Diversification Opportunities for Alternus Energy and Shelf Drilling
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alternus and Shelf is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Alternus Energy Group and Shelf Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shelf Drilling and Alternus Energy 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 Alternus Energy Group are associated (or correlated) with Shelf Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shelf Drilling has no effect on the direction of Alternus Energy i.e., Alternus Energy and Shelf Drilling go up and down completely randomly.
Pair Corralation between Alternus Energy and Shelf Drilling
Assuming the 90 days trading horizon Alternus Energy Group is expected to under-perform the Shelf Drilling. In addition to that, Alternus Energy is 2.77 times more volatile than Shelf Drilling. It trades about -0.03 of its total potential returns per unit of risk. Shelf Drilling is currently generating about -0.03 per unit of volatility. If you would invest 2,330 in Shelf Drilling on September 14, 2024 and sell it today you would lose (1,327) from holding Shelf Drilling or give up 56.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Alternus Energy Group vs. Shelf Drilling
Performance |
| Timeline |
| Alternus Energy Group |
| Shelf Drilling |
Alternus Energy and Shelf Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alternus Energy and Shelf Drilling
The main advantage of trading using opposite Alternus Energy and Shelf Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternus Energy position performs unexpectedly, Shelf Drilling 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 Shelf Drilling will offset losses from the drop in Shelf Drilling's long position.| Alternus Energy vs. Shelf Drilling | Alternus Energy vs. Nordhealth AS | Alternus Energy vs. Grieg Seafood ASA | Alternus Energy vs. Grong Sparebank |
| Shelf Drilling vs. Odfjell Drilling | Shelf Drilling vs. NorAm Drilling AS | Shelf Drilling vs. SD Standard Drilling | Shelf Drilling vs. Kongsberg Gruppen ASA |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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