Correlation Between Dolphin Drilling and Goodtech
Can any of the company-specific risk be diversified away by investing in both Dolphin Drilling and Goodtech 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 Dolphin Drilling and Goodtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dolphin Drilling AS and Goodtech, you can compare the effects of market volatilities on Dolphin Drilling and Goodtech 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 Dolphin Drilling with a short position of Goodtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolphin Drilling and Goodtech.
Diversification Opportunities for Dolphin Drilling and Goodtech
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dolphin and Goodtech is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Drilling AS and Goodtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodtech and Dolphin 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 Dolphin Drilling AS are associated (or correlated) with Goodtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodtech has no effect on the direction of Dolphin Drilling i.e., Dolphin Drilling and Goodtech go up and down completely randomly.
Pair Corralation between Dolphin Drilling and Goodtech
Assuming the 90 days trading horizon Dolphin Drilling AS is expected to under-perform the Goodtech. In addition to that, Dolphin Drilling is 1.95 times more volatile than Goodtech. It trades about -0.13 of its total potential returns per unit of risk. Goodtech is currently generating about -0.23 per unit of volatility. If you would invest 1,005 in Goodtech on August 29, 2024 and sell it today you would lose (87.00) from holding Goodtech or give up 8.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dolphin Drilling AS vs. Goodtech
Performance |
| Timeline |
| Dolphin Drilling |
| Goodtech |
Dolphin Drilling and Goodtech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolphin Drilling and Goodtech
The main advantage of trading using opposite Dolphin Drilling and Goodtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Drilling position performs unexpectedly, Goodtech 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 Goodtech will offset losses from the drop in Goodtech's long position.| Dolphin Drilling vs. BW Offshore | Dolphin Drilling vs. Elkem ASA | Dolphin Drilling vs. Solstad Offsho | Dolphin Drilling vs. Arcticzymes Technologies ASA |
| Goodtech vs. Eidesvik Offshore ASA | Goodtech vs. Kitron ASA | Goodtech vs. Havila Shipping ASA | Goodtech vs. Elkem 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 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.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |