Correlation Between Shelf Drilling and Kraft Bank
Can any of the company-specific risk be diversified away by investing in both Shelf Drilling and Kraft Bank 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 Kraft Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelf Drilling and Kraft Bank Asa, you can compare the effects of market volatilities on Shelf Drilling and Kraft Bank 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 Kraft Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelf Drilling and Kraft Bank.
Diversification Opportunities for Shelf Drilling and Kraft Bank
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shelf and Kraft is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Shelf Drilling and Kraft Bank Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Bank Asa 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 Kraft Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Bank Asa has no effect on the direction of Shelf Drilling i.e., Shelf Drilling and Kraft Bank go up and down completely randomly.
Pair Corralation between Shelf Drilling and Kraft Bank
Assuming the 90 days trading horizon Shelf Drilling is expected to under-perform the Kraft Bank. In addition to that, Shelf Drilling is 2.79 times more volatile than Kraft Bank Asa. It trades about -0.21 of its total potential returns per unit of risk. Kraft Bank Asa is currently generating about -0.02 per unit of volatility. If you would invest 900.00 in Kraft Bank Asa on September 1, 2024 and sell it today you would lose (15.00) from holding Kraft Bank Asa or give up 1.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shelf Drilling vs. Kraft Bank Asa
Performance |
| Timeline |
| Shelf Drilling |
| Kraft Bank Asa |
Shelf Drilling and Kraft Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelf Drilling and Kraft Bank
The main advantage of trading using opposite Shelf Drilling and Kraft Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelf Drilling position performs unexpectedly, Kraft Bank 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 Kraft Bank will offset losses from the drop in Kraft Bank's long position.| Shelf Drilling vs. Odfjell Drilling | Shelf Drilling vs. Borr Drilling | Shelf Drilling vs. Solstad Offsho | Shelf Drilling vs. Kongsberg Automotive Holding |
| Kraft Bank vs. Romerike Sparebank | Kraft Bank vs. Nidaros Sparebank | Kraft Bank vs. Odfjell Drilling | Kraft Bank vs. Helgeland Sparebank |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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