Correlation Between Noble Plc and Cathedral Energy
Can any of the company-specific risk be diversified away by investing in both Noble Plc and Cathedral Energy 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 Noble Plc and Cathedral Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noble plc and Cathedral Energy Services, you can compare the effects of market volatilities on Noble Plc and Cathedral Energy 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 Noble Plc with a short position of Cathedral Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Plc and Cathedral Energy.
Diversification Opportunities for Noble Plc and Cathedral Energy
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Noble and Cathedral is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Noble plc and Cathedral Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathedral Energy Services and Noble Plc 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 Noble plc are associated (or correlated) with Cathedral Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathedral Energy Services has no effect on the direction of Noble Plc i.e., Noble Plc and Cathedral Energy go up and down completely randomly.
Pair Corralation between Noble Plc and Cathedral Energy
Allowing for the 90-day total investment horizon Noble plc is expected to generate 0.77 times more return on investment than Cathedral Energy. However, Noble plc is 1.3 times less risky than Cathedral Energy. It trades about 0.0 of its potential returns per unit of risk. Cathedral Energy Services is currently generating about 0.0 per unit of risk. If you would invest 3,903 in Noble plc on August 24, 2024 and sell it today you would lose (362.00) from holding Noble plc or give up 9.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Noble plc vs. Cathedral Energy Services
Performance |
| Timeline |
| Noble plc |
| Cathedral Energy Services |
Noble Plc and Cathedral Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noble Plc and Cathedral Energy
The main advantage of trading using opposite Noble Plc and Cathedral Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Plc position performs unexpectedly, Cathedral Energy 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 Cathedral Energy will offset losses from the drop in Cathedral Energy's long position.| Noble Plc vs. Nabors Industries | Noble Plc vs. Precision Drilling | Noble Plc vs. Seadrill Limited | Noble Plc vs. Patterson UTI Energy |
| Cathedral Energy vs. Petroleo Brasileiro Petrobras | Cathedral Energy vs. Equinor ASA ADR | Cathedral Energy vs. Eni SpA ADR | Cathedral Energy vs. YPF Sociedad Anonima |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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