Correlation Between Dolphin Drilling and Nordic Technology
Can any of the company-specific risk be diversified away by investing in both Dolphin Drilling and Nordic Technology 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 Technology 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 Technology Group, you can compare the effects of market volatilities on Dolphin Drilling and Nordic Technology 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 Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolphin Drilling and Nordic Technology.
Diversification Opportunities for Dolphin Drilling and Nordic Technology
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dolphin and Nordic is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Drilling AS and Nordic Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordic Technology 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 Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordic Technology has no effect on the direction of Dolphin Drilling i.e., Dolphin Drilling and Nordic Technology go up and down completely randomly.
Pair Corralation between Dolphin Drilling and Nordic Technology
Assuming the 90 days trading horizon Dolphin Drilling AS is expected to under-perform the Nordic Technology. In addition to that, Dolphin Drilling is 1.58 times more volatile than Nordic Technology Group. It trades about -0.13 of its total potential returns per unit of risk. Nordic Technology Group is currently generating about 0.17 per unit of volatility. If you would invest 250.00 in Nordic Technology Group on August 29, 2024 and sell it today you would earn a total of 20.00 from holding Nordic Technology Group or generate 8.0% 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 Technology Group
Performance |
| Timeline |
| Dolphin Drilling |
| Nordic Technology |
Dolphin Drilling and Nordic Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolphin Drilling and Nordic Technology
The main advantage of trading using opposite Dolphin Drilling and Nordic Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Drilling position performs unexpectedly, Nordic Technology 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 Technology will offset losses from the drop in Nordic Technology's long position.| Dolphin Drilling vs. BW Offshore | Dolphin Drilling vs. Elkem ASA | Dolphin Drilling vs. Solstad Offsho | Dolphin Drilling vs. Arcticzymes Technologies ASA |
| Nordic Technology vs. Next Biometrics Group | Nordic Technology vs. Elkem ASA | Nordic Technology vs. Vow ASA | Nordic Technology 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |