Correlation Between SINGAPORE POST and NorAm Drilling
Can any of the company-specific risk be diversified away by investing in both SINGAPORE POST and NorAm Drilling 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 SINGAPORE POST and NorAm Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE POST and NorAm Drilling AS, you can compare the effects of market volatilities on SINGAPORE POST and NorAm Drilling 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 SINGAPORE POST with a short position of NorAm Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE POST and NorAm Drilling.
Diversification Opportunities for SINGAPORE POST and NorAm Drilling
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between SINGAPORE and NorAm is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE POST and NorAm Drilling AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NorAm Drilling AS and SINGAPORE POST 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 SINGAPORE POST are associated (or correlated) with NorAm Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NorAm Drilling AS has no effect on the direction of SINGAPORE POST i.e., SINGAPORE POST and NorAm Drilling go up and down completely randomly.
Pair Corralation between SINGAPORE POST and NorAm Drilling
Assuming the 90 days trading horizon SINGAPORE POST is expected to generate 0.57 times more return on investment than NorAm Drilling. However, SINGAPORE POST is 1.76 times less risky than NorAm Drilling. It trades about 0.06 of its potential returns per unit of risk. NorAm Drilling AS is currently generating about 0.01 per unit of risk. If you would invest 36.00 in SINGAPORE POST on August 28, 2024 and sell it today you would earn a total of 1.00 from holding SINGAPORE POST or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SINGAPORE POST vs. NorAm Drilling AS
Performance |
| Timeline |
| SINGAPORE POST |
| NorAm Drilling AS |
SINGAPORE POST and NorAm Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE POST and NorAm Drilling
The main advantage of trading using opposite SINGAPORE POST and NorAm Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE POST position performs unexpectedly, NorAm Drilling 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 NorAm Drilling will offset losses from the drop in NorAm Drilling's long position.| SINGAPORE POST vs. Superior Plus Corp | SINGAPORE POST vs. NMI Holdings | SINGAPORE POST vs. Origin Agritech | SINGAPORE POST vs. SIVERS SEMICONDUCTORS AB |
| NorAm Drilling vs. Universal Insurance Holdings | NorAm Drilling vs. Selective Insurance Group | NorAm Drilling vs. Japan Post Insurance | NorAm Drilling vs. Nufarm Limited |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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