Correlation Between Datalogic SpA and Schlumberger

Can any of the company-specific risk be diversified away by investing in both Datalogic SpA 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 Datalogic SpA and Schlumberger into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Datalogic SpA and Schlumberger Limited, you can compare the effects of market volatilities on Datalogic SpA 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 Datalogic SpA with a short position of Schlumberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datalogic SpA and Schlumberger.

Diversification Opportunities for Datalogic SpA and Schlumberger

-0.32

Correlation Coefficient

Datalogic SpA  Schlumberger

Very good diversification

The 3 months correlation between Datalogic and Schlumberger is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Datalogic SpA and Schlumberger Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schlumberger Limited and Datalogic SpA 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 Datalogic SpA 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 Limited has no effect on the direction of Datalogic SpA i.e., Datalogic SpA and Schlumberger go up and down completely randomly.

Pair Corralation between Datalogic SpA and Schlumberger

Assuming the 90 days trading horizon Datalogic SpA is expected to under-perform the Schlumberger. But the stock apears to be less risky and, when comparing its historical volatility, Datalogic SpA is 1.04 times less risky than Schlumberger. The stock trades about -0.15 of its potential returns per unit of risk. The Schlumberger Limited is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3,661  in Schlumberger Limited on September 27, 2024 and sell it today you would lose (96.00) from holding Schlumberger Limited or give up 2.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Datalogic SpA  vs.  Schlumberger Limited

Datalogic SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Datalogic SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Schlumberger Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Schlumberger Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Schlumberger is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Datalogic SpA and Schlumberger

The main advantage of trading using opposite Datalogic SpA and Schlumberger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datalogic SpA 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.

The idea behind Datalogic SpA and Schlumberger Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..