Correlation Between Precision Drilling and AGL Energy
Can any of the company-specific risk be diversified away by investing in both Precision Drilling and AGL 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 Precision Drilling and AGL Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precision Drilling and AGL Energy Limited, you can compare the effects of market volatilities on Precision Drilling and AGL 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 Precision Drilling with a short position of AGL Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision Drilling and AGL Energy.
Diversification Opportunities for Precision Drilling and AGL Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Precision and AGL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Precision Drilling and AGL Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGL Energy Limited and Precision 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 Precision Drilling are associated (or correlated) with AGL Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGL Energy Limited has no effect on the direction of Precision Drilling i.e., Precision Drilling and AGL Energy go up and down completely randomly.
Pair Corralation between Precision Drilling and AGL Energy
If you would invest 705.00 in AGL Energy Limited on September 12, 2024 and sell it today you would earn a total of 0.00 from holding AGL Energy Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Precision Drilling vs. AGL Energy Limited
Performance |
| Timeline |
| Precision Drilling |
| AGL Energy Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Precision Drilling and AGL Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precision Drilling and AGL Energy
The main advantage of trading using opposite Precision Drilling and AGL Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision Drilling position performs unexpectedly, AGL 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 AGL Energy will offset losses from the drop in AGL Energy's long position.| Precision Drilling vs. Helmerich and Payne | Precision Drilling vs. Nabors Industries | Precision Drilling vs. Seadrill Limited | Precision Drilling vs. Patterson UTI Energy |
| AGL Energy vs. Sonida Senior Living | AGL Energy vs. Codexis | AGL Energy vs. Braskem SA Class | AGL Energy vs. Teleflex Incorporated |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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