Correlation Between Schlumberger and ResMed
Can any of the company-specific risk be diversified away by investing in both Schlumberger and ResMed 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 Schlumberger and ResMed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schlumberger NV and ResMed Inc, you can compare the effects of market volatilities on Schlumberger and ResMed 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 Schlumberger with a short position of ResMed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schlumberger and ResMed.
Diversification Opportunities for Schlumberger and ResMed
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Schlumberger and ResMed is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Schlumberger NV and ResMed Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ResMed Inc and Schlumberger 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 Schlumberger NV are associated (or correlated) with ResMed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ResMed Inc has no effect on the direction of Schlumberger i.e., Schlumberger and ResMed go up and down completely randomly.
Pair Corralation between Schlumberger and ResMed
Considering the 90-day investment horizon Schlumberger NV is expected to generate 0.52 times more return on investment than ResMed. However, Schlumberger NV is 1.92 times less risky than ResMed. It trades about -0.27 of its potential returns per unit of risk. ResMed Inc is currently generating about -0.17 per unit of risk. If you would invest 5,448 in Schlumberger NV on January 19, 2024 and sell it today you would lose (354.00) from holding Schlumberger NV or give up 6.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schlumberger NV vs. ResMed Inc
Performance |
| Timeline |
| Schlumberger NV |
| ResMed Inc |
Schlumberger and ResMed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schlumberger and ResMed
The main advantage of trading using opposite Schlumberger and ResMed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schlumberger position performs unexpectedly, ResMed 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 ResMed will offset losses from the drop in ResMed's long position.| Schlumberger vs. Enerflex | Schlumberger vs. Dril Quip | Schlumberger vs. Geospace Technologies | Schlumberger vs. Newpark Resources |
| ResMed vs. Teleflex Incorporated | ResMed vs. West Pharmaceutical Services | ResMed vs. Alcon AG | ResMed vs. ICU Medical |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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