Correlation Between Cathedral Energy and Noble Plc
Can any of the company-specific risk be diversified away by investing in both Cathedral Energy and Noble Plc 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 Cathedral Energy and Noble Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cathedral Energy Services and Noble plc, you can compare the effects of market volatilities on Cathedral Energy and Noble Plc 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 Cathedral Energy with a short position of Noble Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathedral Energy and Noble Plc.
Diversification Opportunities for Cathedral Energy and Noble Plc
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cathedral and Noble is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cathedral Energy Services and Noble plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noble plc and Cathedral 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 Cathedral Energy Services are associated (or correlated) with Noble Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noble plc has no effect on the direction of Cathedral Energy i.e., Cathedral Energy and Noble Plc go up and down completely randomly.
Pair Corralation between Cathedral Energy and Noble Plc
Assuming the 90 days horizon Cathedral Energy is expected to generate 4.78 times less return on investment than Noble Plc. But when comparing it to its historical volatility, Cathedral Energy Services is 2.09 times less risky than Noble Plc. It trades about 0.07 of its potential returns per unit of risk. Noble plc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,146 in Noble plc on August 24, 2024 and sell it today you would earn a total of 324.00 from holding Noble plc or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cathedral Energy Services vs. Noble plc
Performance |
| Timeline |
| Cathedral Energy Services |
| Noble plc |
Cathedral Energy and Noble Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathedral Energy and Noble Plc
The main advantage of trading using opposite Cathedral Energy and Noble Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathedral Energy position performs unexpectedly, Noble Plc 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 Noble Plc will offset losses from the drop in Noble Plc's long position.| Cathedral Energy vs. Petroleo Brasileiro Petrobras | Cathedral Energy vs. Equinor ASA ADR | Cathedral Energy vs. Eni SpA ADR | Cathedral Energy vs. YPF Sociedad Anonima |
| Noble Plc vs. Nabors Industries | Noble Plc vs. Precision Drilling | Noble Plc vs. Seadrill Limited | Noble Plc vs. Patterson UTI Energy |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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