Correlation Between Shelf Drilling and Exact Therapeutics
Can any of the company-specific risk be diversified away by investing in both Shelf Drilling and Exact Therapeutics 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 Exact Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelf Drilling and Exact Therapeutics AS, you can compare the effects of market volatilities on Shelf Drilling and Exact Therapeutics 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 Exact Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelf Drilling and Exact Therapeutics.
Diversification Opportunities for Shelf Drilling and Exact Therapeutics
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shelf and Exact is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Shelf Drilling and Exact Therapeutics AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exact Therapeutics 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 Exact Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exact Therapeutics has no effect on the direction of Shelf Drilling i.e., Shelf Drilling and Exact Therapeutics go up and down completely randomly.
Pair Corralation between Shelf Drilling and Exact Therapeutics
Assuming the 90 days trading horizon Shelf Drilling is expected to under-perform the Exact Therapeutics. In addition to that, Shelf Drilling is 2.62 times more volatile than Exact Therapeutics AS. It trades about -0.24 of its total potential returns per unit of risk. Exact Therapeutics AS is currently generating about 0.34 per unit of volatility. If you would invest 500.00 in Exact Therapeutics AS on September 4, 2024 and sell it today you would earn a total of 100.00 from holding Exact Therapeutics AS or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shelf Drilling vs. Exact Therapeutics AS
Performance |
| Timeline |
| Shelf Drilling |
| Exact Therapeutics |
Shelf Drilling and Exact Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelf Drilling and Exact Therapeutics
The main advantage of trading using opposite Shelf Drilling and Exact Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelf Drilling position performs unexpectedly, Exact Therapeutics 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 Exact Therapeutics will offset losses from the drop in Exact Therapeutics' long position.| Shelf Drilling vs. BW Offshore | Shelf Drilling vs. Subsea 7 SA | Shelf Drilling vs. Elkem ASA | Shelf Drilling vs. Integrated Wind Solutions |
| Exact Therapeutics vs. Carasent ASA | Exact Therapeutics vs. Bergenbio ASA | Exact Therapeutics vs. Photocure | Exact Therapeutics vs. Kitron 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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