Correlation Between Dolphin Drilling and Nordic Mining
Can any of the company-specific risk be diversified away by investing in both Dolphin Drilling and Nordic Mining 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 Nordic Mining 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 Nordic Mining ASA, you can compare the effects of market volatilities on Dolphin Drilling and Nordic Mining 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 Nordic Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolphin Drilling and Nordic Mining.
Diversification Opportunities for Dolphin Drilling and Nordic Mining
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dolphin and Nordic is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Drilling AS and Nordic Mining ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Mining 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 Nordic Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Mining ASA has no effect on the direction of Dolphin Drilling i.e., Dolphin Drilling and Nordic Mining go up and down completely randomly.
Pair Corralation between Dolphin Drilling and Nordic Mining
Assuming the 90 days trading horizon Dolphin Drilling AS is expected to under-perform the Nordic Mining. But the stock apears to be less risky and, when comparing its historical volatility, Dolphin Drilling AS is 1.12 times less risky than Nordic Mining. The stock trades about -0.06 of its potential returns per unit of risk. The Nordic Mining ASA is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,488 in Nordic Mining ASA on September 3, 2024 and sell it today you would earn a total of 53.00 from holding Nordic Mining ASA or generate 2.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dolphin Drilling AS vs. Nordic Mining ASA
Performance |
| Timeline |
| Dolphin Drilling |
| Nordic Mining ASA |
Dolphin Drilling and Nordic Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolphin Drilling and Nordic Mining
The main advantage of trading using opposite Dolphin Drilling and Nordic Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Drilling position performs unexpectedly, Nordic Mining 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 Nordic Mining will offset losses from the drop in Nordic Mining'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 |
| Nordic Mining vs. Elkem ASA | Nordic Mining vs. Integrated Wind Solutions | Nordic Mining vs. Vow ASA | Nordic Mining vs. North Energy 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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