Correlation Between Oceaneering International and US Silica
Can any of the company-specific risk be diversified away by investing in both Oceaneering International and US Silica 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 Oceaneering International and US Silica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oceaneering International and US Silica Holdings, you can compare the effects of market volatilities on Oceaneering International and US Silica 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 Oceaneering International with a short position of US Silica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oceaneering International and US Silica.
Diversification Opportunities for Oceaneering International and US Silica
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Oceaneering and SLCA is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Oceaneering International and US Silica Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Silica Holdings and Oceaneering International 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 Oceaneering International are associated (or correlated) with US Silica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Silica Holdings has no effect on the direction of Oceaneering International i.e., Oceaneering International and US Silica go up and down completely randomly.
Pair Corralation between Oceaneering International and US Silica
Considering the 90-day investment horizon Oceaneering International is expected to generate 0.51 times more return on investment than US Silica. However, Oceaneering International is 1.96 times less risky than US Silica. It trades about 0.07 of its potential returns per unit of risk. US Silica Holdings is currently generating about -0.03 per unit of risk. If you would invest 1,380 in Oceaneering International on September 2, 2024 and sell it today you would earn a total of 1,618 from holding Oceaneering International or generate 117.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 82.86% |
| Values | Daily Returns |
Oceaneering International vs. US Silica Holdings
Performance |
| Timeline |
| Oceaneering International |
| US Silica Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Oceaneering International and US Silica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oceaneering International and US Silica
The main advantage of trading using opposite Oceaneering International and US Silica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceaneering International position performs unexpectedly, US Silica 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 US Silica will offset losses from the drop in US Silica's long position.| Oceaneering International vs. Helix Energy Solutions | Oceaneering International vs. Newpark Resources | Oceaneering International vs. RPC Inc | Oceaneering International vs. Oil States International |
| US Silica vs. Newpark Resources | US Silica vs. North American Construction | US Silica vs. ProPetro Holding Corp | US Silica vs. Ranger 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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