Correlation Between S-E BANKEN and DAWSON GEOPHYSICAL
Can any of the company-specific risk be diversified away by investing in both S-E BANKEN and DAWSON GEOPHYSICAL 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 S-E BANKEN and DAWSON GEOPHYSICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between S E BANKEN A and DAWSON GEOPHYSICAL, you can compare the effects of market volatilities on S-E BANKEN and DAWSON GEOPHYSICAL 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 S-E BANKEN with a short position of DAWSON GEOPHYSICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of S-E BANKEN and DAWSON GEOPHYSICAL.
Diversification Opportunities for S-E BANKEN and DAWSON GEOPHYSICAL
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between S-E and DAWSON is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding S E BANKEN A and DAWSON GEOPHYSICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAWSON GEOPHYSICAL and S-E BANKEN 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 S E BANKEN A are associated (or correlated) with DAWSON GEOPHYSICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAWSON GEOPHYSICAL has no effect on the direction of S-E BANKEN i.e., S-E BANKEN and DAWSON GEOPHYSICAL go up and down completely randomly.
Pair Corralation between S-E BANKEN and DAWSON GEOPHYSICAL
Assuming the 90 days trading horizon S E BANKEN A is expected to generate 1.05 times more return on investment than DAWSON GEOPHYSICAL. However, S-E BANKEN is 1.05 times more volatile than DAWSON GEOPHYSICAL. It trades about 0.12 of its potential returns per unit of risk. DAWSON GEOPHYSICAL is currently generating about -0.17 per unit of risk. If you would invest 1,327 in S E BANKEN A on November 4, 2024 and sell it today you would earn a total of 44.00 from holding S E BANKEN A or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
S E BANKEN A vs. DAWSON GEOPHYSICAL
Performance |
| Timeline |
| S E BANKEN |
| DAWSON GEOPHYSICAL |
S-E BANKEN and DAWSON GEOPHYSICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S-E BANKEN and DAWSON GEOPHYSICAL
The main advantage of trading using opposite S-E BANKEN and DAWSON GEOPHYSICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S-E BANKEN position performs unexpectedly, DAWSON GEOPHYSICAL 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 DAWSON GEOPHYSICAL will offset losses from the drop in DAWSON GEOPHYSICAL's long position.| S-E BANKEN vs. Gaztransport Technigaz SA | S-E BANKEN vs. TITANIUM TRANSPORTGROUP | S-E BANKEN vs. CN DATANG C | S-E BANKEN vs. BII Railway Transportation |
| DAWSON GEOPHYSICAL vs. SIVERS SEMICONDUCTORS AB | DAWSON GEOPHYSICAL vs. NorAm Drilling AS | DAWSON GEOPHYSICAL vs. Volkswagen AG | DAWSON GEOPHYSICAL vs. Darden Restaurants |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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