Correlation Between Odfjell Drilling and Okea ASA
Can any of the company-specific risk be diversified away by investing in both Odfjell Drilling and Okea ASA 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 Odfjell Drilling and Okea ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Odfjell Drilling and Okea ASA, you can compare the effects of market volatilities on Odfjell Drilling and Okea ASA 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 Odfjell Drilling with a short position of Okea ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Odfjell Drilling and Okea ASA.
Diversification Opportunities for Odfjell Drilling and Okea ASA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Odfjell and Okea is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Odfjell Drilling and Okea ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okea ASA and Odfjell 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 Odfjell Drilling are associated (or correlated) with Okea ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okea ASA has no effect on the direction of Odfjell Drilling i.e., Odfjell Drilling and Okea ASA go up and down completely randomly.
Pair Corralation between Odfjell Drilling and Okea ASA
Assuming the 90 days trading horizon Odfjell Drilling is expected to generate 0.95 times more return on investment than Okea ASA. However, Odfjell Drilling is 1.05 times less risky than Okea ASA. It trades about 0.09 of its potential returns per unit of risk. Okea ASA is currently generating about -0.06 per unit of risk. If you would invest 3,243 in Odfjell Drilling on September 4, 2024 and sell it today you would earn a total of 1,767 from holding Odfjell Drilling or generate 54.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Odfjell Drilling vs. Okea ASA
Performance |
| Timeline |
| Odfjell Drilling |
| Okea ASA |
Odfjell Drilling and Okea ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Odfjell Drilling and Okea ASA
The main advantage of trading using opposite Odfjell Drilling and Okea ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Odfjell Drilling position performs unexpectedly, Okea ASA 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 Okea ASA will offset losses from the drop in Okea ASA's long position.| Odfjell Drilling vs. BW Offshore | Odfjell Drilling vs. Subsea 7 SA | Odfjell Drilling vs. Elkem ASA | Odfjell Drilling vs. Integrated Wind Solutions |
| Okea ASA vs. Awilco Drilling PLC | Okea ASA vs. Nordic Mining ASA | Okea ASA vs. Odfjell Drilling | Okea ASA vs. Nordic Semiconductor 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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