Correlation Between Cathedral Energy and Vantage Drilling
Can any of the company-specific risk be diversified away by investing in both Cathedral Energy and Vantage 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 Cathedral Energy and Vantage Drilling 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 Vantage Drilling International, you can compare the effects of market volatilities on Cathedral Energy and Vantage 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 Cathedral Energy with a short position of Vantage Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cathedral Energy and Vantage Drilling.
Diversification Opportunities for Cathedral Energy and Vantage Drilling
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Cathedral and Vantage is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Cathedral Energy Services and Vantage Drilling International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vantage Drilling Int 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 Vantage Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vantage Drilling Int has no effect on the direction of Cathedral Energy i.e., Cathedral Energy and Vantage Drilling go up and down completely randomly.
Pair Corralation between Cathedral Energy and Vantage Drilling
Assuming the 90 days horizon Cathedral Energy Services is expected to under-perform the Vantage Drilling. But the pink sheet apears to be less risky and, when comparing its historical volatility, Cathedral Energy Services is 2.51 times less risky than Vantage Drilling. The pink sheet trades about 0.0 of its potential returns per unit of risk. The Vantage Drilling International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,565 in Vantage Drilling International on August 24, 2024 and sell it today you would earn a total of 1,060 from holding Vantage Drilling International or generate 67.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cathedral Energy Services vs. Vantage Drilling International
Performance |
| Timeline |
| Cathedral Energy Services |
| Vantage Drilling Int |
Cathedral Energy and Vantage Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cathedral Energy and Vantage Drilling
The main advantage of trading using opposite Cathedral Energy and Vantage Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cathedral Energy position performs unexpectedly, Vantage 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 Vantage Drilling will offset losses from the drop in Vantage Drilling'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 |
| Vantage Drilling vs. Noble plc | Vantage Drilling vs. Sinopec Oilfield Service | Vantage Drilling vs. Transocean | Vantage Drilling vs. Helmerich and Payne |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |