Correlation Between Shawcor and Schlumberger
Can any of the company-specific risk be diversified away by investing in both Shawcor and Schlumberger 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 Shawcor and Schlumberger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shawcor and Schlumberger NV, you can compare the effects of market volatilities on Shawcor and Schlumberger 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 Shawcor with a short position of Schlumberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shawcor and Schlumberger.
Diversification Opportunities for Shawcor and Schlumberger
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Shawcor and Schlumberger is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Shawcor and Schlumberger NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schlumberger NV and Shawcor 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 Shawcor are associated (or correlated) with Schlumberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schlumberger NV has no effect on the direction of Shawcor i.e., Shawcor and Schlumberger go up and down completely randomly.
Pair Corralation between Shawcor and Schlumberger
Assuming the 90 days horizon Shawcor is expected to generate 15.55 times less return on investment than Schlumberger. In addition to that, Shawcor is 1.4 times more volatile than Schlumberger NV. It trades about 0.0 of its total potential returns per unit of risk. Schlumberger NV is currently generating about 0.02 per unit of volatility. If you would invest 4,788 in Schlumberger NV on January 24, 2024 and sell it today you would earn a total of 163.00 from holding Schlumberger NV or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.78% |
| Values | Daily Returns |
Shawcor vs. Schlumberger NV
Performance |
| Timeline |
| Shawcor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Schlumberger NV |
Shawcor and Schlumberger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shawcor and Schlumberger
The main advantage of trading using opposite Shawcor and Schlumberger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shawcor position performs unexpectedly, Schlumberger 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 Schlumberger will offset losses from the drop in Schlumberger's long position.| Shawcor vs. Indo Tambangraya Megah | Shawcor vs. Bukit Asam Tbk | Shawcor vs. Geo Energy Resources | Shawcor vs. Yancoal Australia |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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