Correlation Between Forum Energy and Independence Contract
Can any of the company-specific risk be diversified away by investing in both Forum Energy and Independence Contract 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 Forum Energy and Independence Contract into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forum Energy Technologies and Independence Contract Drilling, you can compare the effects of market volatilities on Forum Energy and Independence Contract 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 Forum Energy with a short position of Independence Contract. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Energy and Independence Contract.
Diversification Opportunities for Forum Energy and Independence Contract
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Forum and Independence is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Forum Energy Technologies and Independence Contract Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence Contract and Forum Energy 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 Forum Energy Technologies are associated (or correlated) with Independence Contract. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Contract has no effect on the direction of Forum Energy i.e., Forum Energy and Independence Contract go up and down completely randomly.
Pair Corralation between Forum Energy and Independence Contract
If you would invest 1,398 in Forum Energy Technologies on September 1, 2024 and sell it today you would earn a total of 127.00 from holding Forum Energy Technologies or generate 9.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Forum Energy Technologies vs. Independence Contract Drilling
Performance |
| Timeline |
| Forum Energy Technologies |
| Independence Contract |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Forum Energy and Independence Contract Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Energy and Independence Contract
The main advantage of trading using opposite Forum Energy and Independence Contract positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Energy position performs unexpectedly, Independence Contract 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 Independence Contract will offset losses from the drop in Independence Contract's long position.| Forum Energy vs. Enerflex | Forum Energy vs. Now Inc | Forum Energy vs. Bristow Group | Forum Energy vs. Helix Energy Solutions |
| Independence Contract vs. Forum Energy Technologies | Independence Contract vs. KLX Energy Services | Independence Contract vs. Mammoth Energy Services | Independence Contract vs. Borr Drilling |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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