Correlation Between Dolphin Drilling and Kraft Bank
Can any of the company-specific risk be diversified away by investing in both Dolphin Drilling and Kraft Bank 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 Kraft Bank 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 Kraft Bank Asa, you can compare the effects of market volatilities on Dolphin Drilling and Kraft Bank 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 Kraft Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolphin Drilling and Kraft Bank.
Diversification Opportunities for Dolphin Drilling and Kraft Bank
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dolphin and Kraft is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Drilling AS and Kraft Bank Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Bank 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 Kraft Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Bank Asa has no effect on the direction of Dolphin Drilling i.e., Dolphin Drilling and Kraft Bank go up and down completely randomly.
Pair Corralation between Dolphin Drilling and Kraft Bank
Assuming the 90 days trading horizon Dolphin Drilling AS is expected to under-perform the Kraft Bank. In addition to that, Dolphin Drilling is 1.45 times more volatile than Kraft Bank Asa. It trades about -0.13 of its total potential returns per unit of risk. Kraft Bank Asa is currently generating about -0.17 per unit of volatility. If you would invest 920.00 in Kraft Bank Asa on August 29, 2024 and sell it today you would lose (80.00) from holding Kraft Bank Asa or give up 8.7% 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. Kraft Bank Asa
Performance |
| Timeline |
| Dolphin Drilling |
| Kraft Bank Asa |
Dolphin Drilling and Kraft Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolphin Drilling and Kraft Bank
The main advantage of trading using opposite Dolphin Drilling and Kraft Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Drilling position performs unexpectedly, Kraft Bank 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 Kraft Bank will offset losses from the drop in Kraft Bank's long position.| Dolphin Drilling vs. BW Offshore | Dolphin Drilling vs. Elkem ASA | Dolphin Drilling vs. Solstad Offsho | Dolphin Drilling vs. Arcticzymes Technologies ASA |
| Kraft Bank vs. Eidesvik Offshore ASA | Kraft Bank vs. Romerike Sparebank | Kraft Bank vs. Melhus Sparebank | Kraft Bank vs. Sea1 Offshore |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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