Correlation Between SIEM OFFSHORE and Anglo American
Can any of the company-specific risk be diversified away by investing in both SIEM OFFSHORE and Anglo American 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 Anglo American 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 Anglo American plc, you can compare the effects of market volatilities on SIEM OFFSHORE and Anglo American 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 Anglo American. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIEM OFFSHORE and Anglo American.
Diversification Opportunities for SIEM OFFSHORE and Anglo American
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between SIEM and Anglo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding SIEM OFFSHORE NEW and Anglo American plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo American plc 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 Anglo American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo American plc has no effect on the direction of SIEM OFFSHORE i.e., SIEM OFFSHORE and Anglo American go up and down completely randomly.
Pair Corralation between SIEM OFFSHORE and Anglo American
Assuming the 90 days trading horizon SIEM OFFSHORE NEW is expected to generate 1.25 times more return on investment than Anglo American. However, SIEM OFFSHORE is 1.25 times more volatile than Anglo American plc. It trades about 0.08 of its potential returns per unit of risk. Anglo American plc is currently generating about 0.1 per unit of risk. If you would invest 221.00 in SIEM OFFSHORE NEW on September 5, 2024 and sell it today you would earn a total of 10.00 from holding SIEM OFFSHORE NEW or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SIEM OFFSHORE NEW vs. Anglo American plc
Performance |
| Timeline |
| SIEM OFFSHORE NEW |
| Anglo American plc |
SIEM OFFSHORE and Anglo American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIEM OFFSHORE and Anglo American
The main advantage of trading using opposite SIEM OFFSHORE and Anglo American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIEM OFFSHORE position performs unexpectedly, Anglo American 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 Anglo American will offset losses from the drop in Anglo American's long position.| SIEM OFFSHORE vs. ONEOK Inc | SIEM OFFSHORE vs. Superior Plus Corp | SIEM OFFSHORE vs. NMI Holdings | SIEM OFFSHORE vs. Origin Agritech |
| Anglo American vs. QINGCI GAMES INC | Anglo American vs. STMicroelectronics NV | Anglo American vs. HOCHSCHILD MINING | Anglo American vs. Penn National Gaming |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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