Correlation Between Shelf Drilling and MPC Container
Can any of the company-specific risk be diversified away by investing in both Shelf Drilling and MPC Container 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 MPC Container into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shelf Drilling and MPC Container Ships, you can compare the effects of market volatilities on Shelf Drilling and MPC Container 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 MPC Container. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shelf Drilling and MPC Container.
Diversification Opportunities for Shelf Drilling and MPC Container
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Shelf and MPC is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Shelf Drilling and MPC Container Ships in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPC Container Ships 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 MPC Container. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPC Container Ships has no effect on the direction of Shelf Drilling i.e., Shelf Drilling and MPC Container go up and down completely randomly.
Pair Corralation between Shelf Drilling and MPC Container
Assuming the 90 days trading horizon Shelf Drilling is expected to under-perform the MPC Container. In addition to that, Shelf Drilling is 2.17 times more volatile than MPC Container Ships. It trades about -0.21 of its total potential returns per unit of risk. MPC Container Ships is currently generating about 0.01 per unit of volatility. If you would invest 2,169 in MPC Container Ships on September 1, 2024 and sell it today you would lose (6.00) from holding MPC Container Ships or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Shelf Drilling vs. MPC Container Ships
Performance |
| Timeline |
| Shelf Drilling |
| MPC Container Ships |
Shelf Drilling and MPC Container Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shelf Drilling and MPC Container
The main advantage of trading using opposite Shelf Drilling and MPC Container positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shelf Drilling position performs unexpectedly, MPC Container 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 MPC Container will offset losses from the drop in MPC Container's long position.| Shelf Drilling vs. Odfjell Drilling | Shelf Drilling vs. Borr Drilling | Shelf Drilling vs. Solstad Offsho | Shelf Drilling vs. Kongsberg Automotive Holding |
| MPC Container vs. Havila Shipping ASA | MPC Container vs. Shelf Drilling | MPC Container vs. Solstad Offsho | MPC Container vs. Eidesvik Offshore 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |