Correlation Between SIEM OFFSHORE and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both SIEM OFFSHORE and Dairy Farm 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 Dairy Farm 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 Dairy Farm International, you can compare the effects of market volatilities on SIEM OFFSHORE and Dairy Farm 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 Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEM OFFSHORE and Dairy Farm.
Diversification Opportunities for SIEM OFFSHORE and Dairy Farm
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between SIEM and Dairy is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding SIEM OFFSHORE NEW and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International 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 Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of SIEM OFFSHORE i.e., SIEM OFFSHORE and Dairy Farm go up and down completely randomly.
Pair Corralation between SIEM OFFSHORE and Dairy Farm
Assuming the 90 days trading horizon SIEM OFFSHORE NEW is expected to generate 1.29 times more return on investment than Dairy Farm. However, SIEM OFFSHORE is 1.29 times more volatile than Dairy Farm International. It trades about 0.07 of its potential returns per unit of risk. Dairy Farm International is currently generating about 0.01 per unit of risk. If you would invest 107.00 in SIEM OFFSHORE NEW on August 30, 2024 and sell it today you would earn a total of 141.00 from holding SIEM OFFSHORE NEW or generate 131.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIEM OFFSHORE NEW vs. Dairy Farm International
Performance |
| Timeline |
| SIEM OFFSHORE NEW |
| Dairy Farm International |
SIEM OFFSHORE and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIEM OFFSHORE and Dairy Farm
The main advantage of trading using opposite SIEM OFFSHORE and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIEM OFFSHORE position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.The idea behind SIEM OFFSHORE NEW and Dairy Farm International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Dairy Farm vs. TESCO PLC LS 0633333 | Dairy Farm vs. Superior Plus Corp | Dairy Farm vs. NMI Holdings | Dairy Farm vs. SIVERS SEMICONDUCTORS AB |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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