Correlation Between NorAm Drilling and Marks
Can any of the company-specific risk be diversified away by investing in both NorAm Drilling and Marks 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 NorAm Drilling and Marks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NorAm Drilling AS and Marks and Spencer, you can compare the effects of market volatilities on NorAm Drilling and Marks 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 NorAm Drilling with a short position of Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of NorAm Drilling and Marks.
Diversification Opportunities for NorAm Drilling and Marks
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between NorAm and Marks is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NorAm Drilling AS and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer and NorAm Drilling 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 NorAm Drilling AS are associated (or correlated) with Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of NorAm Drilling i.e., NorAm Drilling and Marks go up and down completely randomly.
Pair Corralation between NorAm Drilling and Marks
Assuming the 90 days horizon NorAm Drilling AS is expected to under-perform the Marks. In addition to that, NorAm Drilling is 3.53 times more volatile than Marks and Spencer. It trades about -0.04 of its total potential returns per unit of risk. Marks and Spencer is currently generating about 0.21 per unit of volatility. If you would invest 446.00 in Marks and Spencer on September 13, 2024 and sell it today you would earn a total of 29.00 from holding Marks and Spencer or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NorAm Drilling AS vs. Marks and Spencer
Performance |
| Timeline |
| NorAm Drilling AS |
| Marks and Spencer |
NorAm Drilling and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NorAm Drilling and Marks
The main advantage of trading using opposite NorAm Drilling and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NorAm Drilling position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| NorAm Drilling vs. PennantPark Investment | NorAm Drilling vs. Gladstone Investment | NorAm Drilling vs. WisdomTree Investments | NorAm Drilling vs. AOYAMA TRADING |
| Marks vs. STRAYER EDUCATION | Marks vs. Sportsmans Warehouse Holdings | Marks vs. JD SPORTS FASH | Marks vs. VIAPLAY GROUP AB |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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