Correlation Between Vantage Drilling and Cathedral Energy
Can any of the company-specific risk be diversified away by investing in both Vantage Drilling and Cathedral Energy 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 Vantage Drilling and Cathedral Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vantage Drilling International and Cathedral Energy Services, you can compare the effects of market volatilities on Vantage Drilling and Cathedral Energy 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 Vantage Drilling with a short position of Cathedral Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vantage Drilling and Cathedral Energy.
Diversification Opportunities for Vantage Drilling and Cathedral Energy
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Vantage and Cathedral is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Vantage Drilling International and Cathedral Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathedral Energy Services and Vantage 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 Vantage Drilling International are associated (or correlated) with Cathedral Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathedral Energy Services has no effect on the direction of Vantage Drilling i.e., Vantage Drilling and Cathedral Energy go up and down completely randomly.
Pair Corralation between Vantage Drilling and Cathedral Energy
If you would invest 438.00 in Cathedral Energy Services on August 28, 2024 and sell it today you would earn a total of 14.00 from holding Cathedral Energy Services or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vantage Drilling International vs. Cathedral Energy Services
Performance |
| Timeline |
| Vantage Drilling Int |
| Cathedral Energy Services |
Vantage Drilling and Cathedral Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vantage Drilling and Cathedral Energy
The main advantage of trading using opposite Vantage Drilling and Cathedral Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vantage Drilling position performs unexpectedly, Cathedral Energy 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 Cathedral Energy will offset losses from the drop in Cathedral Energy's long position.| Vantage Drilling vs. Noble plc | Vantage Drilling vs. Sinopec Oilfield Service | Vantage Drilling vs. Transocean | Vantage Drilling vs. Helmerich and Payne |
| Cathedral Energy vs. AKITA Drilling | Cathedral Energy vs. Archer Limited | Cathedral Energy vs. PHX Energy Services | Cathedral Energy vs. Seadrill Limited |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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