Correlation Between SeaBird Exploration and TGS NOPEC
Can any of the company-specific risk be diversified away by investing in both SeaBird Exploration and TGS NOPEC 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 TGS NOPEC 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 TGS NOPEC Geophysical, you can compare the effects of market volatilities on SeaBird Exploration and TGS NOPEC 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 TGS NOPEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of SeaBird Exploration and TGS NOPEC.
Diversification Opportunities for SeaBird Exploration and TGS NOPEC
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SeaBird and TGS is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SeaBird Exploration Plc and TGS NOPEC Geophysical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TGS NOPEC Geophysical 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 TGS NOPEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TGS NOPEC Geophysical has no effect on the direction of SeaBird Exploration i.e., SeaBird Exploration and TGS NOPEC go up and down completely randomly.
Pair Corralation between SeaBird Exploration and TGS NOPEC
Assuming the 90 days trading horizon SeaBird Exploration Plc is expected to generate 1.31 times more return on investment than TGS NOPEC. However, SeaBird Exploration is 1.31 times more volatile than TGS NOPEC Geophysical. It trades about 0.06 of its potential returns per unit of risk. TGS NOPEC Geophysical is currently generating about 0.01 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SeaBird Exploration Plc vs. TGS NOPEC Geophysical
Performance |
| Timeline |
| SeaBird Exploration Plc |
| TGS NOPEC Geophysical |
SeaBird Exploration and TGS NOPEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SeaBird Exploration and TGS NOPEC
The main advantage of trading using opposite SeaBird Exploration and TGS NOPEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SeaBird Exploration position performs unexpectedly, TGS NOPEC 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 TGS NOPEC will offset losses from the drop in TGS NOPEC'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 |
| TGS NOPEC vs. Solstad Offsho | TGS NOPEC vs. Prosafe SE | TGS NOPEC vs. BW Offshore | TGS NOPEC vs. Kongsberg Gruppen ASA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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