Correlation Between Oceaneering International and TGS ASA
Can any of the company-specific risk be diversified away by investing in both Oceaneering International and TGS 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 Oceaneering International and TGS ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oceaneering International and TGS ASA, you can compare the effects of market volatilities on Oceaneering International and TGS 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 Oceaneering International with a short position of TGS ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oceaneering International and TGS ASA.
Diversification Opportunities for Oceaneering International and TGS ASA
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Oceaneering and TGS is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Oceaneering International and TGS ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TGS ASA 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 TGS ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TGS ASA has no effect on the direction of Oceaneering International i.e., Oceaneering International and TGS ASA go up and down completely randomly.
Pair Corralation between Oceaneering International and TGS ASA
Considering the 90-day investment horizon Oceaneering International is expected to generate 0.92 times more return on investment than TGS ASA. However, Oceaneering International is 1.09 times less risky than TGS ASA. It trades about 0.03 of its potential returns per unit of risk. TGS ASA is currently generating about -0.03 per unit of risk. If you would invest 2,331 in Oceaneering International on September 12, 2024 and sell it today you would earn a total of 346.00 from holding Oceaneering International or generate 14.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 59.94% |
| Values | Daily Returns |
Oceaneering International vs. TGS ASA
Performance |
| Timeline |
| Oceaneering International |
| TGS ASA |
Oceaneering International and TGS ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oceaneering International and TGS ASA
The main advantage of trading using opposite Oceaneering International and TGS ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceaneering International position performs unexpectedly, TGS 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 TGS ASA will offset losses from the drop in TGS ASA's long position.| Oceaneering International vs. Baker Hughes Co | Oceaneering International vs. NOV Inc | Oceaneering International vs. Weatherford International PLC | Oceaneering International vs. Tenaris SA ADR |
| TGS ASA vs. Oceaneering International | TGS ASA vs. Nine Energy Service | TGS ASA vs. Schlumberger NV | TGS ASA vs. Calfrac Well 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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