Correlation Between Subsea 7 and Bri-Chem Corp
Can any of the company-specific risk be diversified away by investing in both Subsea 7 and Bri-Chem Corp 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 Subsea 7 and Bri-Chem Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Subsea 7 SA and Bri Chem Corp, you can compare the effects of market volatilities on Subsea 7 and Bri-Chem Corp 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 Subsea 7 with a short position of Bri-Chem Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Subsea 7 and Bri-Chem Corp.
Diversification Opportunities for Subsea 7 and Bri-Chem Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Subsea and Bri-Chem is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Subsea 7 SA and Bri Chem Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bri Chem Corp and Subsea 7 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 Subsea 7 SA are associated (or correlated) with Bri-Chem Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bri Chem Corp has no effect on the direction of Subsea 7 i.e., Subsea 7 and Bri-Chem Corp go up and down completely randomly.
Pair Corralation between Subsea 7 and Bri-Chem Corp
If you would invest 25.00 in Bri Chem Corp on November 28, 2024 and sell it today you would lose (1.00) from holding Bri Chem Corp or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Subsea 7 SA vs. Bri Chem Corp
Performance |
| Timeline |
| Subsea 7 SA |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Bri Chem Corp |
Subsea 7 and Bri-Chem Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Subsea 7 and Bri-Chem Corp
The main advantage of trading using opposite Subsea 7 and Bri-Chem Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Subsea 7 position performs unexpectedly, Bri-Chem Corp 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 Bri-Chem Corp will offset losses from the drop in Bri-Chem Corp's long position.| Subsea 7 vs. Bri Chem Corp | Subsea 7 vs. Pulse Seismic | Subsea 7 vs. Worley Parsons | Subsea 7 vs. Petrofac Ltd ADR |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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