Correlation Between SSP Group and Capital Drilling
Can any of the company-specific risk be diversified away by investing in both SSP Group and Capital 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 SSP Group and Capital Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SSP Group PLC and Capital Drilling, you can compare the effects of market volatilities on SSP Group and Capital 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 SSP Group with a short position of Capital Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of SSP Group and Capital Drilling.
Diversification Opportunities for SSP Group and Capital Drilling
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between SSP and Capital is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding SSP Group PLC and Capital Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Drilling and SSP Group 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 SSP Group PLC are associated (or correlated) with Capital Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Drilling has no effect on the direction of SSP Group i.e., SSP Group and Capital Drilling go up and down completely randomly.
Pair Corralation between SSP Group and Capital Drilling
Assuming the 90 days trading horizon SSP Group PLC is expected to under-perform the Capital Drilling. In addition to that, SSP Group is 1.07 times more volatile than Capital Drilling. It trades about -0.02 of its total potential returns per unit of risk. Capital Drilling is currently generating about 0.03 per unit of volatility. If you would invest 7,604 in Capital Drilling on September 12, 2024 and sell it today you would earn a total of 796.00 from holding Capital Drilling or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SSP Group PLC vs. Capital Drilling
Performance |
| Timeline |
| SSP Group PLC |
| Capital Drilling |
SSP Group and Capital Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SSP Group and Capital Drilling
The main advantage of trading using opposite SSP Group and Capital Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSP Group position performs unexpectedly, Capital 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 Capital Drilling will offset losses from the drop in Capital Drilling's long position.| SSP Group vs. Capital Drilling | SSP Group vs. bet at home AG | SSP Group vs. Waste Management | SSP Group vs. Empire Metals Limited |
| Capital Drilling vs. Zoom Video Communications | Capital Drilling vs. Neometals | Capital Drilling vs. Coor Service Management | Capital Drilling vs. Fidelity Sustainable USD |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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