Correlation Between Dolphin Drilling and Tekna Holding
Can any of the company-specific risk be diversified away by investing in both Dolphin Drilling and Tekna Holding 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 Tekna Holding 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 Tekna Holding AS, you can compare the effects of market volatilities on Dolphin Drilling and Tekna Holding 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 Tekna Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dolphin Drilling and Tekna Holding.
Diversification Opportunities for Dolphin Drilling and Tekna Holding
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dolphin and Tekna is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Dolphin Drilling AS and Tekna Holding AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekna Holding AS 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 Tekna Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekna Holding AS has no effect on the direction of Dolphin Drilling i.e., Dolphin Drilling and Tekna Holding go up and down completely randomly.
Pair Corralation between Dolphin Drilling and Tekna Holding
Assuming the 90 days trading horizon Dolphin Drilling AS is expected to under-perform the Tekna Holding. But the stock apears to be less risky and, when comparing its historical volatility, Dolphin Drilling AS is 1.83 times less risky than Tekna Holding. The stock trades about -0.18 of its potential returns per unit of risk. The Tekna Holding AS is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 406.00 in Tekna Holding AS on September 1, 2024 and sell it today you would lose (46.00) from holding Tekna Holding AS or give up 11.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dolphin Drilling AS vs. Tekna Holding AS
Performance |
| Timeline |
| Dolphin Drilling |
| Tekna Holding AS |
Dolphin Drilling and Tekna Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dolphin Drilling and Tekna Holding
The main advantage of trading using opposite Dolphin Drilling and Tekna Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dolphin Drilling position performs unexpectedly, Tekna Holding 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 Tekna Holding will offset losses from the drop in Tekna Holding's long position.| Dolphin Drilling vs. Shelf Drilling | Dolphin Drilling vs. BW Offshore | Dolphin Drilling vs. Subsea 7 SA | Dolphin Drilling vs. Elkem ASA |
| Tekna Holding vs. Romsdal Sparebank | Tekna Holding vs. BW Offshore | Tekna Holding vs. Nidaros Sparebank | Tekna Holding vs. Sogn 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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