Correlation Between Dno ASA and Gulf Coast
Can any of the company-specific risk be diversified away by investing in both Dno ASA and Gulf Coast 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 Dno ASA and Gulf Coast into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dno ASA and Gulf Coast, you can compare the effects of market volatilities on Dno ASA and Gulf Coast 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 Dno ASA with a short position of Gulf Coast. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dno ASA and Gulf Coast.
Diversification Opportunities for Dno ASA and Gulf Coast
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dno and Gulf is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dno ASA and Gulf Coast in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gulf Coast and Dno ASA 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 Dno ASA are associated (or correlated) with Gulf Coast. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gulf Coast has no effect on the direction of Dno ASA i.e., Dno ASA and Gulf Coast go up and down completely randomly.
Pair Corralation between Dno ASA and Gulf Coast
Assuming the 90 days horizon Dno ASA is expected to under-perform the Gulf Coast. But the pink sheet apears to be less risky and, when comparing its historical volatility, Dno ASA is 8.7 times less risky than Gulf Coast. The pink sheet trades about -0.05 of its potential returns per unit of risk. The Gulf Coast is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Gulf Coast on September 26, 2024 and sell it today you would earn a total of 0.90 from holding Gulf Coast or generate 45.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dno ASA vs. Gulf Coast
Performance |
Timeline |
Dno ASA |
Gulf Coast |
Dno ASA and Gulf Coast Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dno ASA and Gulf Coast
The main advantage of trading using opposite Dno ASA and Gulf Coast positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dno ASA position performs unexpectedly, Gulf Coast 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 Gulf Coast will offset losses from the drop in Gulf Coast's long position.Dno ASA vs. PetroShale | Dno ASA vs. Horizon Oil Limited | Dno ASA vs. Enwell Energy plc | Dno ASA vs. Tullow Oil plc |
Gulf Coast vs. San Leon Energy | Gulf Coast vs. Enwell Energy plc | Gulf Coast vs. Dno ASA | Gulf Coast vs. PetroShale |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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