Correlation Between Dolphin Drilling and Morrow Bank
Can any of the company-specific risk be diversified away by investing in both Dolphin Drilling and Morrow 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 Morrow 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 Morrow Bank ASA, you can compare the effects of market volatilities on Dolphin Drilling and Morrow 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 Morrow Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolphin Drilling and Morrow Bank.
Diversification Opportunities for Dolphin Drilling and Morrow Bank
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dolphin and Morrow is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Drilling AS and Morrow Bank ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morrow 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 Morrow Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morrow Bank ASA has no effect on the direction of Dolphin Drilling i.e., Dolphin Drilling and Morrow Bank go up and down completely randomly.
Pair Corralation between Dolphin Drilling and Morrow Bank
Assuming the 90 days trading horizon Dolphin Drilling AS is expected to generate 1.54 times more return on investment than Morrow Bank. However, Dolphin Drilling is 1.54 times more volatile than Morrow Bank ASA. It trades about 0.11 of its potential returns per unit of risk. Morrow Bank ASA is currently generating about -0.06 per unit of risk. If you would invest 350.00 in Dolphin Drilling AS on October 25, 2024 and sell it today you would earn a total of 20.00 from holding Dolphin Drilling AS or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dolphin Drilling AS vs. Morrow Bank ASA
Performance |
| Timeline |
| Dolphin Drilling |
| Morrow Bank ASA |
Dolphin Drilling and Morrow Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolphin Drilling and Morrow Bank
The main advantage of trading using opposite Dolphin Drilling and Morrow Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Drilling position performs unexpectedly, Morrow 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 Morrow Bank will offset losses from the drop in Morrow Bank'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 |
| Morrow Bank vs. Kraft Bank Asa | Morrow Bank vs. Dolphin Drilling AS | Morrow Bank vs. Awilco Drilling PLC | Morrow Bank vs. Skue 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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