Correlation Between Forum Energy and Oceaneering International
Can any of the company-specific risk be diversified away by investing in both Forum Energy and Oceaneering International 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 Oceaneering International 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 Oceaneering International, you can compare the effects of market volatilities on Forum Energy and Oceaneering International 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 Oceaneering International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Energy and Oceaneering International.
Diversification Opportunities for Forum Energy and Oceaneering International
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Forum and Oceaneering is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Forum Energy Technologies and Oceaneering International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceaneering International 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 Oceaneering International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceaneering International has no effect on the direction of Forum Energy i.e., Forum Energy and Oceaneering International go up and down completely randomly.
Pair Corralation between Forum Energy and Oceaneering International
Considering the 90-day investment horizon Forum Energy Technologies is expected to generate 1.37 times more return on investment than Oceaneering International. However, Forum Energy is 1.37 times more volatile than Oceaneering International. It trades about 0.04 of its potential returns per unit of risk. Oceaneering International is currently generating about -0.12 per unit of risk. If you would invest 1,909 in Forum Energy Technologies on November 18, 2024 and sell it today you would earn a total of 28.00 from holding Forum Energy Technologies or generate 1.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forum Energy Technologies vs. Oceaneering International
Performance |
| Timeline |
| Forum Energy Technologies |
| Oceaneering International |
Forum Energy and Oceaneering International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Energy and Oceaneering International
The main advantage of trading using opposite Forum Energy and Oceaneering International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Energy position performs unexpectedly, Oceaneering International 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 Oceaneering International will offset losses from the drop in Oceaneering International's long position.| Forum Energy vs. Natural Gas Services | Forum Energy vs. Enerflex | Forum Energy vs. Now Inc | Forum Energy vs. Bristow Group |
| Oceaneering International vs. Helix Energy Solutions | Oceaneering International vs. RPC Inc | Oceaneering International vs. Oil States International | Oceaneering International vs. ChampionX |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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