Correlation Between Dno ASA and Subsea 7
Can any of the company-specific risk be diversified away by investing in both Dno ASA and Subsea 7 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 Dno ASA and Subsea 7 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dno ASA and Subsea 7 SA, you can compare the effects of market volatilities on Dno ASA and Subsea 7 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 Dno ASA with a short position of Subsea 7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dno ASA and Subsea 7.
Diversification Opportunities for Dno ASA and Subsea 7
Poor diversification
The 3 months correlation between Dno and Subsea is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Dno ASA and Subsea 7 SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Subsea 7 SA and Dno ASA 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 Dno ASA are associated (or correlated) with Subsea 7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Subsea 7 SA has no effect on the direction of Dno ASA i.e., Dno ASA and Subsea 7 go up and down completely randomly.
Pair Corralation between Dno ASA and Subsea 7
Assuming the 90 days trading horizon Dno ASA is expected to generate 1.14 times more return on investment than Subsea 7. However, Dno ASA is 1.14 times more volatile than Subsea 7 SA. It trades about 0.73 of its potential returns per unit of risk. Subsea 7 SA is currently generating about 0.37 per unit of risk. If you would invest 1,010 in Dno ASA on October 20, 2024 and sell it today you would earn a total of 251.00 from holding Dno ASA or generate 24.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dno ASA vs. Subsea 7 SA
Performance |
| Timeline |
| Dno ASA |
| Subsea 7 SA |
Dno ASA and Subsea 7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dno ASA and Subsea 7
The main advantage of trading using opposite Dno ASA and Subsea 7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dno ASA position performs unexpectedly, Subsea 7 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 Subsea 7 will offset losses from the drop in Subsea 7's long position.| Dno ASA vs. Aker Solutions ASA | Dno ASA vs. Storebrand ASA | Dno ASA vs. Frontline | Dno ASA vs. Subsea 7 SA |
| Subsea 7 vs. TGS NOPEC Geophysical | Subsea 7 vs. Aker Solutions ASA | Subsea 7 vs. Storebrand ASA | Subsea 7 vs. Dno 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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