Correlation Between Schlumberger and Forum Energy
Can any of the company-specific risk be diversified away by investing in both Schlumberger and Forum Energy 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 Schlumberger and Forum Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schlumberger NV and Forum Energy Technologies, you can compare the effects of market volatilities on Schlumberger and Forum Energy 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 Schlumberger with a short position of Forum Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schlumberger and Forum Energy.
Diversification Opportunities for Schlumberger and Forum Energy
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Schlumberger and Forum is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Schlumberger NV and Forum Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forum Energy Technologies and Schlumberger 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 Schlumberger NV are associated (or correlated) with Forum Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forum Energy Technologies has no effect on the direction of Schlumberger i.e., Schlumberger and Forum Energy go up and down completely randomly.
Pair Corralation between Schlumberger and Forum Energy
Considering the 90-day investment horizon Schlumberger NV is expected to generate 0.65 times more return on investment than Forum Energy. However, Schlumberger NV is 1.53 times less risky than Forum Energy. It trades about -0.04 of its potential returns per unit of risk. Forum Energy Technologies is currently generating about -0.05 per unit of risk. If you would invest 5,100 in Schlumberger NV on September 12, 2024 and sell it today you would lose (944.00) from holding Schlumberger NV or give up 18.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schlumberger NV vs. Forum Energy Technologies
Performance |
| Timeline |
| Schlumberger NV |
| Forum Energy Technologies |
Schlumberger and Forum Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schlumberger and Forum Energy
The main advantage of trading using opposite Schlumberger and Forum Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schlumberger position performs unexpectedly, Forum Energy 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 Forum Energy will offset losses from the drop in Forum Energy's long position.| Schlumberger vs. Baker Hughes Co | Schlumberger vs. NOV Inc | Schlumberger vs. Weatherford International PLC | Schlumberger vs. Tenaris SA ADR |
| Forum Energy vs. Schlumberger NV | Forum Energy vs. Tenaris SA ADR | Forum Energy vs. Halliburton | Forum Energy vs. Now Inc |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |