Correlation Between SIEM OFFSHORE and Northland Power
Can any of the company-specific risk be diversified away by investing in both SIEM OFFSHORE and Northland Power 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 SIEM OFFSHORE and Northland Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIEM OFFSHORE NEW and Northland Power, you can compare the effects of market volatilities on SIEM OFFSHORE and Northland Power 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 SIEM OFFSHORE with a short position of Northland Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEM OFFSHORE and Northland Power.
Diversification Opportunities for SIEM OFFSHORE and Northland Power
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between SIEM and Northland is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding SIEM OFFSHORE NEW and Northland Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northland Power and SIEM OFFSHORE 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 SIEM OFFSHORE NEW are associated (or correlated) with Northland Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northland Power has no effect on the direction of SIEM OFFSHORE i.e., SIEM OFFSHORE and Northland Power go up and down completely randomly.
Pair Corralation between SIEM OFFSHORE and Northland Power
Assuming the 90 days trading horizon SIEM OFFSHORE NEW is expected to generate 1.18 times more return on investment than Northland Power. However, SIEM OFFSHORE is 1.18 times more volatile than Northland Power. It trades about 0.05 of its potential returns per unit of risk. Northland Power is currently generating about -0.03 per unit of risk. If you would invest 123.00 in SIEM OFFSHORE NEW on September 14, 2024 and sell it today you would earn a total of 92.00 from holding SIEM OFFSHORE NEW or generate 74.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIEM OFFSHORE NEW vs. Northland Power
Performance |
| Timeline |
| SIEM OFFSHORE NEW |
| Northland Power |
SIEM OFFSHORE and Northland Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIEM OFFSHORE and Northland Power
The main advantage of trading using opposite SIEM OFFSHORE and Northland Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIEM OFFSHORE position performs unexpectedly, Northland Power 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 Northland Power will offset losses from the drop in Northland Power's long position.| SIEM OFFSHORE vs. TC Energy | SIEM OFFSHORE vs. Pembina Pipeline Corp | SIEM OFFSHORE vs. Superior Plus Corp | SIEM OFFSHORE vs. SIVERS SEMICONDUCTORS AB |
| Northland Power vs. Dairy Farm International | Northland Power vs. SIEM OFFSHORE NEW | Northland Power vs. Martin Marietta Materials | Northland Power vs. Rayonier Advanced Materials |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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