Correlation Between DAWSON GEOPHYSICAL and S-E BANKEN
Can any of the company-specific risk be diversified away by investing in both DAWSON GEOPHYSICAL and S-E BANKEN 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 DAWSON GEOPHYSICAL and S-E BANKEN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAWSON GEOPHYSICAL and S E BANKEN A , you can compare the effects of market volatilities on DAWSON GEOPHYSICAL and S-E BANKEN 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 DAWSON GEOPHYSICAL with a short position of S-E BANKEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAWSON GEOPHYSICAL and S-E BANKEN.
Diversification Opportunities for DAWSON GEOPHYSICAL and S-E BANKEN
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DAWSON and S-E is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding DAWSON GEOPHYSICAL and S E BANKEN A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S E BANKEN and DAWSON GEOPHYSICAL 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 DAWSON GEOPHYSICAL are associated (or correlated) with S-E BANKEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S E BANKEN has no effect on the direction of DAWSON GEOPHYSICAL i.e., DAWSON GEOPHYSICAL and S-E BANKEN go up and down completely randomly.
Pair Corralation between DAWSON GEOPHYSICAL and S-E BANKEN
Assuming the 90 days trading horizon DAWSON GEOPHYSICAL is expected to under-perform the S-E BANKEN. But the stock apears to be less risky and, when comparing its historical volatility, DAWSON GEOPHYSICAL is 1.05 times less risky than S-E BANKEN. The stock trades about -0.17 of its potential returns per unit of risk. The S E BANKEN A is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,327 in S E BANKEN A on November 4, 2024 and sell it today you would earn a total of 44.00 from holding S E BANKEN A or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAWSON GEOPHYSICAL vs. S E BANKEN A
Performance |
| Timeline |
| DAWSON GEOPHYSICAL |
| S E BANKEN |
DAWSON GEOPHYSICAL and S-E BANKEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAWSON GEOPHYSICAL and S-E BANKEN
The main advantage of trading using opposite DAWSON GEOPHYSICAL and S-E BANKEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAWSON GEOPHYSICAL position performs unexpectedly, S-E BANKEN 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 S-E BANKEN will offset losses from the drop in S-E BANKEN's long position.| DAWSON GEOPHYSICAL vs. SIVERS SEMICONDUCTORS AB | DAWSON GEOPHYSICAL vs. NorAm Drilling AS | DAWSON GEOPHYSICAL vs. Volkswagen AG | DAWSON GEOPHYSICAL vs. Darden Restaurants |
| S-E BANKEN vs. Gaztransport Technigaz SA | S-E BANKEN vs. TITANIUM TRANSPORTGROUP | S-E BANKEN vs. CN DATANG C | S-E BANKEN vs. BII Railway Transportation |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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