Correlation Between Dolphin Drilling and Itera ASA
Can any of the company-specific risk be diversified away by investing in both Dolphin Drilling and Itera ASA 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 Itera ASA 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 Itera ASA, you can compare the effects of market volatilities on Dolphin Drilling and Itera ASA 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 Itera ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolphin Drilling and Itera ASA.
Diversification Opportunities for Dolphin Drilling and Itera ASA
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dolphin and Itera is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Drilling AS and Itera ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itera ASA 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 Itera ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itera ASA has no effect on the direction of Dolphin Drilling i.e., Dolphin Drilling and Itera ASA go up and down completely randomly.
Pair Corralation between Dolphin Drilling and Itera ASA
Assuming the 90 days trading horizon Dolphin Drilling AS is expected to under-perform the Itera ASA. In addition to that, Dolphin Drilling is 1.28 times more volatile than Itera ASA. It trades about -0.06 of its total potential returns per unit of risk. Itera ASA is currently generating about -0.01 per unit of volatility. If you would invest 1,247 in Itera ASA on September 3, 2024 and sell it today you would lose (349.00) from holding Itera ASA or give up 27.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dolphin Drilling AS vs. Itera ASA
Performance |
| Timeline |
| Dolphin Drilling |
| Itera ASA |
Dolphin Drilling and Itera ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolphin Drilling and Itera ASA
The main advantage of trading using opposite Dolphin Drilling and Itera ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Drilling position performs unexpectedly, Itera ASA 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 Itera ASA will offset losses from the drop in Itera ASA's long position.| Dolphin Drilling vs. Deep Value Driller | Dolphin Drilling vs. Odfjell Drilling | Dolphin Drilling vs. NorAm Drilling AS | Dolphin Drilling vs. SD Standard Drilling |
| Itera ASA vs. Sparebanken Ost | Itera ASA vs. Arcticzymes Technologies ASA | Itera ASA vs. Grong Sparebank | Itera ASA vs. Jaeren Sparebank |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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