Correlation Between Galenfeha and Schlumberger

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

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

Diversification Opportunities for Galenfeha and Schlumberger

-0.73

Correlation Coefficient

Galenfeha  Schlumberger

Pay attention - limited upside

The 3 months correlation between Galenfeha and Schlumberger is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Galenfeha and Schlumberger NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schlumberger NV and Galenfeha 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 Galenfeha are associated (or correlated) with Schlumberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schlumberger NV has no effect on the direction of Galenfeha i.e., Galenfeha and Schlumberger go up and down completely randomly.

Pair Corralation between Galenfeha and Schlumberger

Given the investment horizon of 90 days Galenfeha is expected to generate 69.93 times more return on investment than Schlumberger. However, Galenfeha is 69.93 times more volatile than Schlumberger NV. It trades about 0.13 of its potential returns per unit of risk. Schlumberger NV is currently generating about 0.05 per unit of risk. If you would invest  2.50  in Galenfeha on October 22, 2024 and sell it today you would earn a total of  372.50  from holding Galenfeha or generate 14900.0% return on investment over 90 days.

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

Galenfeha  vs.  Schlumberger NV

Galenfeha

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Galenfeha are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical and fundamental indicators, Galenfeha demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Schlumberger NV

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Schlumberger NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Schlumberger is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Galenfeha and Schlumberger

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

The idea behind Galenfeha and Schlumberger NV 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.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.