Correlation Between Proximar Seafood and Odfjell Drilling
Can any of the company-specific risk be diversified away by investing in both Proximar Seafood and Odfjell Drilling 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 Proximar Seafood and Odfjell Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Proximar Seafood AS and Odfjell Drilling, you can compare the effects of market volatilities on Proximar Seafood and Odfjell Drilling 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 Proximar Seafood with a short position of Odfjell Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proximar Seafood and Odfjell Drilling.
Diversification Opportunities for Proximar Seafood and Odfjell Drilling
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Proximar and Odfjell is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Proximar Seafood AS and Odfjell Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odfjell Drilling and Proximar Seafood 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 Proximar Seafood AS are associated (or correlated) with Odfjell Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odfjell Drilling has no effect on the direction of Proximar Seafood i.e., Proximar Seafood and Odfjell Drilling go up and down completely randomly.
Pair Corralation between Proximar Seafood and Odfjell Drilling
Assuming the 90 days trading horizon Proximar Seafood AS is expected to generate 1.0 times more return on investment than Odfjell Drilling. However, Proximar Seafood is 1.0 times more volatile than Odfjell Drilling. It trades about -0.02 of its potential returns per unit of risk. Odfjell Drilling is currently generating about -0.04 per unit of risk. If you would invest 370.00 in Proximar Seafood AS on September 1, 2024 and sell it today you would lose (25.00) from holding Proximar Seafood AS or give up 6.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proximar Seafood AS vs. Odfjell Drilling
Performance |
| Timeline |
| Proximar Seafood |
| Odfjell Drilling |
Proximar Seafood and Odfjell Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proximar Seafood and Odfjell Drilling
The main advantage of trading using opposite Proximar Seafood and Odfjell Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proximar Seafood position performs unexpectedly, Odfjell Drilling 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 Odfjell Drilling will offset losses from the drop in Odfjell Drilling's long position.| Proximar Seafood vs. Andfjord Salmon AS | Proximar Seafood vs. Elkem ASA | Proximar Seafood vs. Integrated Wind Solutions | Proximar Seafood vs. Vow ASA |
| Odfjell Drilling vs. Shelf Drilling | Odfjell Drilling vs. BW Offshore | Odfjell Drilling vs. Subsea 7 SA | Odfjell Drilling vs. Elkem 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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