Correlation Between Sienna Resources and AKITA Drilling
Can any of the company-specific risk be diversified away by investing in both Sienna Resources and AKITA 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 Sienna Resources and AKITA Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sienna Resources and AKITA Drilling, you can compare the effects of market volatilities on Sienna Resources and AKITA 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 Sienna Resources with a short position of AKITA Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sienna Resources and AKITA Drilling.
Diversification Opportunities for Sienna Resources and AKITA Drilling
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sienna and AKITA is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sienna Resources and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Sienna Resources 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 Sienna Resources are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Sienna Resources i.e., Sienna Resources and AKITA Drilling go up and down completely randomly.
Pair Corralation between Sienna Resources and AKITA Drilling
Assuming the 90 days horizon Sienna Resources is expected to generate 8.0 times more return on investment than AKITA Drilling. However, Sienna Resources is 8.0 times more volatile than AKITA Drilling. It trades about 0.06 of its potential returns per unit of risk. AKITA Drilling is currently generating about 0.05 per unit of risk. If you would invest 3.00 in Sienna Resources on October 9, 2024 and sell it today you would earn a total of 0.00 from holding Sienna Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sienna Resources vs. AKITA Drilling
Performance |
| Timeline |
| Sienna Resources |
| AKITA Drilling |
Sienna Resources and AKITA Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sienna Resources and AKITA Drilling
The main advantage of trading using opposite Sienna Resources and AKITA Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sienna Resources position performs unexpectedly, AKITA 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 AKITA Drilling will offset losses from the drop in AKITA Drilling's long position.| Sienna Resources vs. Fremont Gold | Sienna Resources vs. iShares Canadian HYBrid | Sienna Resources vs. Altagas Cum Red | Sienna Resources vs. European Residential Real |
| AKITA Drilling vs. Ensign Energy Services | AKITA Drilling vs. Total Energy Services | AKITA Drilling vs. PHX Energy Services | AKITA Drilling vs. Western Energy Services |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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