Correlation Between Bristow and Tetra Technologies
Can any of the company-specific risk be diversified away by investing in both Bristow and Tetra Technologies 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 Bristow and Tetra Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bristow Group and Tetra Technologies, you can compare the effects of market volatilities on Bristow and Tetra Technologies 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 Bristow with a short position of Tetra Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristow and Tetra Technologies.
Diversification Opportunities for Bristow and Tetra Technologies
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bristow and Tetra is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bristow Group and Tetra Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tetra Technologies and Bristow 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 Bristow Group are associated (or correlated) with Tetra Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tetra Technologies has no effect on the direction of Bristow i.e., Bristow and Tetra Technologies go up and down completely randomly.
Pair Corralation between Bristow and Tetra Technologies
Given the investment horizon of 90 days Bristow is expected to generate 1.0 times less return on investment than Tetra Technologies. But when comparing it to its historical volatility, Bristow Group is 1.23 times less risky than Tetra Technologies. It trades about 0.29 of its potential returns per unit of risk. Tetra Technologies is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 335.00 in Tetra Technologies on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Tetra Technologies or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristow Group vs. Tetra Technologies
Performance |
| Timeline |
| Bristow Group |
| Tetra Technologies |
Bristow and Tetra Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristow and Tetra Technologies
The main advantage of trading using opposite Bristow and Tetra Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristow position performs unexpectedly, Tetra Technologies 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 Tetra Technologies will offset losses from the drop in Tetra Technologies' long position.| Bristow vs. Oil States International | Bristow vs. Geospace Technologies | Bristow vs. Weatherford International PLC | Bristow vs. Enerflex |
| Tetra Technologies vs. Enerflex | Tetra Technologies vs. Now Inc | Tetra Technologies vs. Bristow Group | Tetra Technologies vs. Helix Energy Solutions |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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