Correlation Between Shelf Drilling and Cadeler As
Can any of the company-specific risk be diversified away by investing in both Shelf Drilling and Cadeler As 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 Shelf Drilling and Cadeler As into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelf Drilling and Cadeler As, you can compare the effects of market volatilities on Shelf Drilling and Cadeler As 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 Shelf Drilling with a short position of Cadeler As. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelf Drilling and Cadeler As.
Diversification Opportunities for Shelf Drilling and Cadeler As
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shelf and Cadeler is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Shelf Drilling and Cadeler As in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadeler As and Shelf Drilling 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 Shelf Drilling are associated (or correlated) with Cadeler As. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadeler As has no effect on the direction of Shelf Drilling i.e., Shelf Drilling and Cadeler As go up and down completely randomly.
Pair Corralation between Shelf Drilling and Cadeler As
Assuming the 90 days trading horizon Shelf Drilling is expected to generate 0.98 times more return on investment than Cadeler As. However, Shelf Drilling is 1.02 times less risky than Cadeler As. It trades about -0.26 of its potential returns per unit of risk. Cadeler As is currently generating about -0.38 per unit of risk. If you would invest 903.00 in Shelf Drilling on December 1, 2024 and sell it today you would lose (85.00) from holding Shelf Drilling or give up 9.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelf Drilling vs. Cadeler As
Performance |
| Timeline |
| Shelf Drilling |
| Cadeler As |
Shelf Drilling and Cadeler As Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelf Drilling and Cadeler As
The main advantage of trading using opposite Shelf Drilling and Cadeler As positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelf Drilling position performs unexpectedly, Cadeler As 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 Cadeler As will offset losses from the drop in Cadeler As' long position.| Shelf Drilling vs. Odfjell Drilling | Shelf Drilling vs. Solstad Offsho | Shelf Drilling vs. Kongsberg Automotive Holding |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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