Correlation Between Saipem SpA and Pulse Seismic
Can any of the company-specific risk be diversified away by investing in both Saipem SpA and Pulse Seismic 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 Saipem SpA and Pulse Seismic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saipem SpA and Pulse Seismic, you can compare the effects of market volatilities on Saipem SpA and Pulse Seismic 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 Saipem SpA with a short position of Pulse Seismic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saipem SpA and Pulse Seismic.
Diversification Opportunities for Saipem SpA and Pulse Seismic
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Saipem and Pulse is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Saipem SpA and Pulse Seismic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pulse Seismic and Saipem SpA 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 Saipem SpA are associated (or correlated) with Pulse Seismic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pulse Seismic has no effect on the direction of Saipem SpA i.e., Saipem SpA and Pulse Seismic go up and down completely randomly.
Pair Corralation between Saipem SpA and Pulse Seismic
Assuming the 90 days horizon Saipem SpA is expected to under-perform the Pulse Seismic. But the pink sheet apears to be less risky and, when comparing its historical volatility, Saipem SpA is 4.87 times less risky than Pulse Seismic. The pink sheet trades about -0.18 of its potential returns per unit of risk. The Pulse Seismic is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 170.00 in Pulse Seismic on November 28, 2024 and sell it today you would earn a total of 23.00 from holding Pulse Seismic or generate 13.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Saipem SpA vs. Pulse Seismic
Performance |
| Timeline |
| Saipem SpA |
| Pulse Seismic |
Saipem SpA and Pulse Seismic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saipem SpA and Pulse Seismic
The main advantage of trading using opposite Saipem SpA and Pulse Seismic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saipem SpA position performs unexpectedly, Pulse Seismic 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 Pulse Seismic will offset losses from the drop in Pulse Seismic's long position.| Saipem SpA vs. Worley Parsons | Saipem SpA vs. Petrofac Ltd ADR | Saipem SpA vs. SMG Industries | Saipem SpA vs. NXT Energy Solutions |
| Pulse Seismic vs. Now Inc | Pulse Seismic vs. Enerflex | Pulse Seismic vs. Bristow Group | Pulse Seismic vs. Forum Energy Technologies |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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