Correlation Between TGS NOPEC and Electromagnetic Geoservices
Can any of the company-specific risk be diversified away by investing in both TGS NOPEC and Electromagnetic Geoservices 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 TGS NOPEC and Electromagnetic Geoservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TGS NOPEC Geophysical and Electromagnetic Geoservices ASA, you can compare the effects of market volatilities on TGS NOPEC and Electromagnetic Geoservices 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 TGS NOPEC with a short position of Electromagnetic Geoservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of TGS NOPEC and Electromagnetic Geoservices.
Diversification Opportunities for TGS NOPEC and Electromagnetic Geoservices
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between TGS and Electromagnetic is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding TGS NOPEC Geophysical and Electromagnetic Geoservices AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electromagnetic Geoservices and TGS NOPEC 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 TGS NOPEC Geophysical are associated (or correlated) with Electromagnetic Geoservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electromagnetic Geoservices has no effect on the direction of TGS NOPEC i.e., TGS NOPEC and Electromagnetic Geoservices go up and down completely randomly.
Pair Corralation between TGS NOPEC and Electromagnetic Geoservices
Assuming the 90 days trading horizon TGS NOPEC Geophysical is expected to generate 0.52 times more return on investment than Electromagnetic Geoservices. However, TGS NOPEC Geophysical is 1.91 times less risky than Electromagnetic Geoservices. It trades about 0.34 of its potential returns per unit of risk. Electromagnetic Geoservices ASA is currently generating about 0.09 per unit of risk. If you would invest 10,100 in TGS NOPEC Geophysical on September 13, 2024 and sell it today you would earn a total of 1,350 from holding TGS NOPEC Geophysical or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TGS NOPEC Geophysical vs. Electromagnetic Geoservices AS
Performance |
| Timeline |
| TGS NOPEC Geophysical |
| Electromagnetic Geoservices |
TGS NOPEC and Electromagnetic Geoservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TGS NOPEC and Electromagnetic Geoservices
The main advantage of trading using opposite TGS NOPEC and Electromagnetic Geoservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TGS NOPEC position performs unexpectedly, Electromagnetic Geoservices 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 Electromagnetic Geoservices will offset losses from the drop in Electromagnetic Geoservices' long position.| TGS NOPEC vs. Solstad Offsho | TGS NOPEC vs. Prosafe SE | TGS NOPEC vs. BW Offshore | TGS NOPEC vs. Kongsberg Gruppen ASA |
| Electromagnetic Geoservices vs. Prosafe SE | Electromagnetic Geoservices vs. TGS NOPEC Geophysical | Electromagnetic Geoservices vs. SeaBird Exploration Plc | Electromagnetic Geoservices vs. BW Offshore |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |