Correlation Between PetroShale and Dno ASA
Can any of the company-specific risk be diversified away by investing in both PetroShale and Dno ASA 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 PetroShale and Dno ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetroShale and Dno ASA, you can compare the effects of market volatilities on PetroShale and Dno ASA 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 PetroShale with a short position of Dno ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetroShale and Dno ASA.
Diversification Opportunities for PetroShale and Dno ASA
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between PetroShale and Dno is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding PetroShale and Dno ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dno ASA and PetroShale 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 PetroShale are associated (or correlated) with Dno ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dno ASA has no effect on the direction of PetroShale i.e., PetroShale and Dno ASA go up and down completely randomly.
Pair Corralation between PetroShale and Dno ASA
Assuming the 90 days horizon PetroShale is expected to under-perform the Dno ASA. But the otc stock apears to be less risky and, when comparing its historical volatility, PetroShale is 1.08 times less risky than Dno ASA. The otc stock trades about -0.02 of its potential returns per unit of risk. The Dno ASA is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 88.00 in Dno ASA on December 29, 2024 and sell it today you would earn a total of 34.00 from holding Dno ASA or generate 38.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 78.69% |
Values | Daily Returns |
PetroShale vs. Dno ASA
Performance |
Timeline |
PetroShale |
Dno ASA |
PetroShale and Dno ASA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PetroShale and Dno ASA
The main advantage of trading using opposite PetroShale and Dno ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetroShale position performs unexpectedly, Dno ASA 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 Dno ASA will offset losses from the drop in Dno ASA's long position.PetroShale vs. Dno ASA | PetroShale vs. Horizon Oil Limited | PetroShale vs. Enwell Energy plc | PetroShale vs. Tullow Oil plc |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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