Correlation Between Equitable Holdings and NorAm Drilling
Can any of the company-specific risk be diversified away by investing in both Equitable Holdings and NorAm 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 Equitable Holdings and NorAm Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equitable Holdings and NorAm Drilling AS, you can compare the effects of market volatilities on Equitable Holdings and NorAm 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 Equitable Holdings with a short position of NorAm Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equitable Holdings and NorAm Drilling.
Diversification Opportunities for Equitable Holdings and NorAm Drilling
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Equitable and NorAm is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Equitable Holdings and NorAm Drilling AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorAm Drilling AS and Equitable Holdings 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 Equitable Holdings are associated (or correlated) with NorAm Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorAm Drilling AS has no effect on the direction of Equitable Holdings i.e., Equitable Holdings and NorAm Drilling go up and down completely randomly.
Pair Corralation between Equitable Holdings and NorAm Drilling
Assuming the 90 days horizon Equitable Holdings is expected to generate 0.6 times more return on investment than NorAm Drilling. However, Equitable Holdings is 1.66 times less risky than NorAm Drilling. It trades about 0.12 of its potential returns per unit of risk. NorAm Drilling AS is currently generating about -0.02 per unit of risk. If you would invest 4,158 in Equitable Holdings on September 1, 2024 and sell it today you would earn a total of 322.00 from holding Equitable Holdings or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Equitable Holdings vs. NorAm Drilling AS
Performance |
| Timeline |
| Equitable Holdings |
| NorAm Drilling AS |
Equitable Holdings and NorAm Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equitable Holdings and NorAm Drilling
The main advantage of trading using opposite Equitable Holdings and NorAm Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equitable Holdings position performs unexpectedly, NorAm 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 NorAm Drilling will offset losses from the drop in NorAm Drilling's long position.| Equitable Holdings vs. NN Group NV | Equitable Holdings vs. Superior Plus Corp | Equitable Holdings vs. Origin Agritech | Equitable Holdings vs. Identiv |
| NorAm Drilling vs. Martin Marietta Materials | NorAm Drilling vs. Reinsurance Group of | NorAm Drilling vs. ZURICH INSURANCE GROUP | NorAm Drilling vs. LIFENET INSURANCE CO |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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