Correlation Between GOLD ROAD and SIEM OFFSHORE

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

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

Diversification Opportunities for GOLD ROAD and SIEM OFFSHORE

-0.42

Correlation Coefficient

GOLD ROAD  SIEM OFFSHORE

Very good diversification

The 3 months correlation between GOLD and SIEM is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES 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 GOLD ROAD 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 GOLD ROAD RES 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 GOLD ROAD i.e., GOLD ROAD and SIEM OFFSHORE go up and down completely randomly.

Pair Corralation between GOLD ROAD and SIEM OFFSHORE

Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 1.03 times more return on investment than SIEM OFFSHORE. However, GOLD ROAD is 1.03 times more volatile than SIEM OFFSHORE NEW. It trades about 0.12 of its potential returns per unit of risk. SIEM OFFSHORE NEW is currently generating about -0.12 per unit of risk. If you would invest  105.00  in GOLD ROAD RES on October 5, 2024 and sell it today you would earn a total of  17.00  from holding GOLD ROAD RES or generate 16.19% return on investment over 90 days.

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

GOLD ROAD RES  vs.  SIEM OFFSHORE NEW

GOLD ROAD RES

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days GOLD ROAD RES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather uncertain basic indicators, GOLD ROAD exhibited 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 fragile 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 GOLD ROAD and SIEM OFFSHORE

The main advantage of trading using opposite GOLD ROAD and SIEM OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD 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 GOLD ROAD RES 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.