Correlation Between Sogn Sparebank and Dolphin Drilling
Can any of the company-specific risk be diversified away by investing in both Sogn Sparebank and Dolphin 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 Sogn Sparebank and Dolphin Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sogn Sparebank and Dolphin Drilling AS, you can compare the effects of market volatilities on Sogn Sparebank and Dolphin 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 Sogn Sparebank with a short position of Dolphin Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sogn Sparebank and Dolphin Drilling.
Diversification Opportunities for Sogn Sparebank and Dolphin Drilling
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sogn and Dolphin is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sogn Sparebank and Dolphin Drilling AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dolphin Drilling and Sogn Sparebank 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 Sogn Sparebank are associated (or correlated) with Dolphin Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dolphin Drilling has no effect on the direction of Sogn Sparebank i.e., Sogn Sparebank and Dolphin Drilling go up and down completely randomly.
Pair Corralation between Sogn Sparebank and Dolphin Drilling
Assuming the 90 days trading horizon Sogn Sparebank is expected to generate 1.44 times more return on investment than Dolphin Drilling. However, Sogn Sparebank is 1.44 times more volatile than Dolphin Drilling AS. It trades about 0.2 of its potential returns per unit of risk. Dolphin Drilling AS is currently generating about 0.0 per unit of risk. If you would invest 24,795 in Sogn Sparebank on November 3, 2024 and sell it today you would earn a total of 4,305 from holding Sogn Sparebank or generate 17.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sogn Sparebank vs. Dolphin Drilling AS
Performance |
| Timeline |
| Sogn Sparebank |
| Dolphin Drilling |
Sogn Sparebank and Dolphin Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sogn Sparebank and Dolphin Drilling
The main advantage of trading using opposite Sogn Sparebank and Dolphin Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sogn Sparebank position performs unexpectedly, Dolphin 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 Dolphin Drilling will offset losses from the drop in Dolphin Drilling's long position.| Sogn Sparebank vs. Sparebanken Sor | Sogn Sparebank vs. SpareBank 1 stlandet | Sogn Sparebank vs. Holand og Setskog | Sogn Sparebank vs. Sparebank 1 Ringerike |
| Dolphin Drilling vs. Deep Value Driller | Dolphin Drilling vs. Odfjell Drilling | Dolphin Drilling vs. NorAm Drilling AS | Dolphin Drilling vs. SD Standard Drilling |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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