Correlation Between Civeo Corp and ADM Endeavors

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

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

Diversification Opportunities for Civeo Corp and ADM Endeavors

-0.04

Correlation Coefficient

Civeo Corp  ADM Endeavors

Good diversification

The 3 months correlation between Civeo and ADM is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Civeo Corp and ADM Endeavors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADM Endeavors and Civeo Corp 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 Civeo Corp are associated (or correlated) with ADM Endeavors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADM Endeavors has no effect on the direction of Civeo Corp i.e., Civeo Corp and ADM Endeavors go up and down completely randomly.

Pair Corralation between Civeo Corp and ADM Endeavors

Given the investment horizon of 90 days Civeo Corp is expected to generate 2.4 times less return on investment than ADM Endeavors. But when comparing it to its historical volatility, Civeo Corp is 1.57 times less risky than ADM Endeavors. It trades about 0.03 of its potential returns per unit of risk. ADM Endeavors is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4.00  in ADM Endeavors on December 27, 2024 and sell it today you would earn a total of  0.20  from holding ADM Endeavors or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Civeo Corp  vs.  ADM Endeavors

Civeo Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Civeo Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Civeo Corp is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

ADM Endeavors

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ADM Endeavors are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak primary indicators, ADM Endeavors reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Civeo Corp and ADM Endeavors

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

The idea behind Civeo Corp and ADM Endeavors 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.