Correlation Between Shawcor and Trican Well

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

By analyzing existing cross correlation between Shawcor and Trican Well Service, you can compare the effects of market volatilities on Shawcor and Trican Well 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 Trican Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shawcor and Trican Well.

Diversification Opportunities for Shawcor and Trican Well

-0.3

Correlation Coefficient

Shawcor  Trican Well

Very good diversification

The 3 months correlation between Shawcor and Trican is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Shawcor and Trican Well Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trican Well Service 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 Trican Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trican Well Service has no effect on the direction of Shawcor i.e., Shawcor and Trican Well go up and down completely randomly.

Pair Corralation between Shawcor and Trican Well

If you would invest  349.00  in Trican Well Service on September 5, 2024 and sell it today you would earn a total of  4.00  from holding Trican Well Service or generate 1.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Shawcor  vs.  Trican Well Service

Shawcor

Risk-Adjusted Performance

0 of 100

Very Weak

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

Trican Well Service

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Trican Well Service are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Trican Well is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Shawcor and Trican Well

The main advantage of trading using opposite Shawcor and Trican Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shawcor position performs unexpectedly, Trican Well 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 Trican Well will offset losses from the drop in Trican Well's long position.

The idea behind Shawcor and Trican Well Service 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.