Correlation Between TGS ASA and US Silica
Can any of the company-specific risk be diversified away by investing in both TGS ASA and US Silica 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 ASA and US Silica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TGS ASA and US Silica Holdings, you can compare the effects of market volatilities on TGS ASA and US Silica 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 ASA with a short position of US Silica. Check out your portfolio center. Please also check ongoing floating volatility patterns of TGS ASA and US Silica.
Diversification Opportunities for TGS ASA and US Silica
Modest diversification
The 3 months correlation between TGS and SLCA is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding TGS ASA and US Silica Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Silica Holdings and TGS ASA 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 ASA are associated (or correlated) with US Silica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Silica Holdings has no effect on the direction of TGS ASA i.e., TGS ASA and US Silica go up and down completely randomly.
Pair Corralation between TGS ASA and US Silica
Assuming the 90 days horizon TGS ASA is expected to generate 0.25 times more return on investment than US Silica. However, TGS ASA is 4.04 times less risky than US Silica. It trades about 0.03 of its potential returns per unit of risk. US Silica Holdings is currently generating about -0.04 per unit of risk. If you would invest 884.00 in TGS ASA on September 2, 2024 and sell it today you would earn a total of 76.00 from holding TGS ASA or generate 8.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 82.32% |
| Values | Daily Returns |
TGS ASA vs. US Silica Holdings
Performance |
| Timeline |
| TGS ASA |
| US Silica Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TGS ASA and US Silica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TGS ASA and US Silica
The main advantage of trading using opposite TGS ASA and US Silica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TGS ASA position performs unexpectedly, US Silica 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 US Silica will offset losses from the drop in US Silica's long position.| TGS ASA vs. Expro Group Holdings | TGS ASA vs. ChampionX | TGS ASA vs. Ranger Energy Services | TGS ASA vs. Cactus Inc |
| US Silica vs. Newpark Resources | US Silica vs. North American Construction | US Silica vs. ProPetro Holding Corp | US Silica vs. Ranger Energy Services |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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