Correlation Between DIeteren Group and SIEM OFFSHORE

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

By analyzing existing cross correlation between DIeteren Group SA and SIEM OFFSHORE NEW, you can compare the effects of market volatilities on DIeteren Group and SIEM OFFSHORE 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 DIeteren Group with a short position of SIEM OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIeteren Group and SIEM OFFSHORE.

Diversification Opportunities for DIeteren Group and SIEM OFFSHORE

-0.39

Correlation Coefficient

DIeteren Group  SIEM OFFSHORE

Very good diversification

The 3 months correlation between DIeteren and SIEM is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding DIeteren Group SA and SIEM OFFSHORE NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEM OFFSHORE NEW and DIeteren Group 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 DIeteren Group SA are associated (or correlated) with SIEM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEM OFFSHORE NEW has no effect on the direction of DIeteren Group i.e., DIeteren Group and SIEM OFFSHORE go up and down completely randomly.

Pair Corralation between DIeteren Group and SIEM OFFSHORE

Assuming the 90 days trading horizon DIeteren Group SA is expected to generate 1.24 times more return on investment than SIEM OFFSHORE. However, DIeteren Group is 1.24 times more volatile than SIEM OFFSHORE NEW. It trades about 0.18 of its potential returns per unit of risk. SIEM OFFSHORE NEW is currently generating about -0.02 per unit of risk. If you would invest  12,791  in DIeteren Group SA on October 6, 2024 and sell it today you would earn a total of  3,349  from holding DIeteren Group SA or generate 26.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.5%
Values	Daily Returns

DIeteren Group SA  vs.  SIEM OFFSHORE NEW

DIeteren Group SA

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DIeteren Group SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, DIeteren Group reported solid returns over the last few months and may actually be approaching a breakup point.

SIEM OFFSHORE NEW

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with DIeteren Group and SIEM OFFSHORE

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

The idea behind DIeteren Group SA and SIEM OFFSHORE NEW 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.