Correlation Between Transocean and AGL Energy
Can any of the company-specific risk be diversified away by investing in both Transocean 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 Transocean and AGL Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transocean and AGL Energy Limited, you can compare the effects of market volatilities on Transocean 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 Transocean with a short position of AGL Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transocean and AGL Energy.
Diversification Opportunities for Transocean and AGL Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Transocean and AGL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Transocean 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 Transocean 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 Transocean 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 Transocean i.e., Transocean and AGL Energy go up and down completely randomly.
Pair Corralation between Transocean and AGL Energy
If you would invest 415.00 in Transocean on September 12, 2024 and sell it today you would lose (6.00) from holding Transocean or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Transocean vs. AGL Energy Limited
Performance |
| Timeline |
| Transocean |
| AGL Energy Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Transocean and AGL Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transocean and AGL Energy
The main advantage of trading using opposite Transocean and AGL Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transocean 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.| Transocean vs. Helmerich and Payne | Transocean vs. Noble plc | Transocean vs. Nabors Industries | Transocean vs. Precision Drilling |
| 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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