Correlation Between SeaBird Exploration and Prosafe SE
Can any of the company-specific risk be diversified away by investing in both SeaBird Exploration and Prosafe SE 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 SeaBird Exploration and Prosafe SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SeaBird Exploration Plc and Prosafe SE, you can compare the effects of market volatilities on SeaBird Exploration and Prosafe SE 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 SeaBird Exploration with a short position of Prosafe SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of SeaBird Exploration and Prosafe SE.
Diversification Opportunities for SeaBird Exploration and Prosafe SE
-0.96 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SeaBird and Prosafe is -0.96. Overlapping area represents the amount of risk that can be diversified away by holding SeaBird Exploration Plc and Prosafe SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosafe SE and SeaBird Exploration 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 SeaBird Exploration Plc are associated (or correlated) with Prosafe SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosafe SE has no effect on the direction of SeaBird Exploration i.e., SeaBird Exploration and Prosafe SE go up and down completely randomly.
Pair Corralation between SeaBird Exploration and Prosafe SE
Assuming the 90 days trading horizon SeaBird Exploration Plc is expected to generate 0.82 times more return on investment than Prosafe SE. However, SeaBird Exploration Plc is 1.22 times less risky than Prosafe SE. It trades about 0.06 of its potential returns per unit of risk. Prosafe SE is currently generating about -0.12 per unit of risk. If you would invest 272.00 in SeaBird Exploration Plc on September 14, 2024 and sell it today you would earn a total of 307.00 from holding SeaBird Exploration Plc or generate 112.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SeaBird Exploration Plc vs. Prosafe SE
Performance |
| Timeline |
| SeaBird Exploration Plc |
| Prosafe SE |
SeaBird Exploration and Prosafe SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SeaBird Exploration and Prosafe SE
The main advantage of trading using opposite SeaBird Exploration and Prosafe SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SeaBird Exploration position performs unexpectedly, Prosafe SE 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 Prosafe SE will offset losses from the drop in Prosafe SE's long position.| SeaBird Exploration vs. Electromagnetic Geoservices ASA | SeaBird Exploration vs. TGS NOPEC Geophysical | SeaBird Exploration vs. Solstad Offsho | SeaBird Exploration vs. Prosafe SE |
| Prosafe SE vs. Aker ASA | Prosafe SE vs. Aker Solutions ASA | Prosafe SE vs. BW Offshore | Prosafe SE vs. Solstad Offsho |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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