Correlation Between Digjam and Aban Offshore

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Digjam and Aban Offshore 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 Digjam and Aban Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digjam Limited and Aban Offshore Limited, you can compare the effects of market volatilities on Digjam and Aban Offshore 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 Digjam with a short position of Aban Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digjam and Aban Offshore.

Diversification Opportunities for Digjam and Aban Offshore

0.78
  Correlation Coefficient

Poor diversification

The 3 months correlation between Digjam and Aban is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Digjam Limited and Aban Offshore Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aban Offshore Limited and Digjam 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 Digjam Limited are associated (or correlated) with Aban Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aban Offshore Limited has no effect on the direction of Digjam i.e., Digjam and Aban Offshore go up and down completely randomly.

Pair Corralation between Digjam and Aban Offshore

Assuming the 90 days trading horizon Digjam Limited is expected to under-perform the Aban Offshore. But the stock apears to be less risky and, when comparing its historical volatility, Digjam Limited is 1.26 times less risky than Aban Offshore. The stock trades about -0.5 of its potential returns per unit of risk. The Aban Offshore Limited is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest  6,367  in Aban Offshore Limited on October 25, 2024 and sell it today you would lose (890.00) from holding Aban Offshore Limited or give up 13.98% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Digjam Limited  vs.  Aban Offshore Limited

 Performance 
       Timeline  
Digjam Limited 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Digjam Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.
Aban Offshore Limited 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aban Offshore Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Digjam and Aban Offshore Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Digjam and Aban Offshore

The main advantage of trading using opposite Digjam and Aban Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digjam position performs unexpectedly, Aban Offshore 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 Aban Offshore will offset losses from the drop in Aban Offshore's long position.
The idea behind Digjam Limited and Aban Offshore Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

Other Complementary Tools

Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Bonds Directory
Find actively traded corporate debentures issued by US companies