Correlation Between Major Drilling and AKITA Drilling
Can any of the company-specific risk be diversified away by investing in both Major Drilling and AKITA Drilling 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 Major Drilling and AKITA Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Major Drilling Group and AKITA Drilling, you can compare the effects of market volatilities on Major Drilling and AKITA Drilling 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 Major Drilling with a short position of AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Drilling and AKITA Drilling.
Diversification Opportunities for Major Drilling and AKITA Drilling
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Major and AKITA is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Major Drilling Group and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Major Drilling 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 Major Drilling Group are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Major Drilling i.e., Major Drilling and AKITA Drilling go up and down completely randomly.
Pair Corralation between Major Drilling and AKITA Drilling
Assuming the 90 days trading horizon Major Drilling Group is expected to generate 1.51 times more return on investment than AKITA Drilling. However, Major Drilling is 1.51 times more volatile than AKITA Drilling. It trades about 0.06 of its potential returns per unit of risk. AKITA Drilling is currently generating about -0.07 per unit of risk. If you would invest 838.00 in Major Drilling Group on September 1, 2024 and sell it today you would earn a total of 21.00 from holding Major Drilling Group or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Major Drilling Group vs. AKITA Drilling
Performance |
| Timeline |
| Major Drilling Group |
| AKITA Drilling |
Major Drilling and AKITA Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Major Drilling and AKITA Drilling
The main advantage of trading using opposite Major Drilling and AKITA Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Major Drilling position performs unexpectedly, AKITA Drilling 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 AKITA Drilling will offset losses from the drop in AKITA Drilling's long position.| Major Drilling vs. Pason Systems | Major Drilling vs. HudBay Minerals | Major Drilling vs. Ensign Energy Services | Major Drilling vs. Precision Drilling |
| AKITA Drilling vs. Ensign Energy Services | AKITA Drilling vs. Total Energy Services | AKITA Drilling vs. PHX Energy Services | AKITA Drilling vs. Western Energy Services |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |