Correlation Between SIEM OFFSHORE and OAR RESOURCES

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

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

Diversification Opportunities for SIEM OFFSHORE and OAR RESOURCES

-0.47

Correlation Coefficient

SIEM OFFSHORE  OAR RESOURCES

Very good diversification

The 3 months correlation between SIEM and OAR is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding SIEM OFFSHORE NEW and OAR RESOURCES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAR RESOURCES LTD and SIEM OFFSHORE 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 SIEM OFFSHORE NEW are associated (or correlated) with OAR RESOURCES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAR RESOURCES LTD has no effect on the direction of SIEM OFFSHORE i.e., SIEM OFFSHORE and OAR RESOURCES go up and down completely randomly.

Pair Corralation between SIEM OFFSHORE and OAR RESOURCES

Assuming the 90 days trading horizon SIEM OFFSHORE is expected to generate 44.43 times less return on investment than OAR RESOURCES. But when comparing it to its historical volatility, SIEM OFFSHORE NEW is 22.43 times less risky than OAR RESOURCES. It trades about 0.05 of its potential returns per unit of risk. OAR RESOURCES LTD is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  60.00  in OAR RESOURCES LTD on September 20, 2024 and sell it today you would lose (58.70) from holding OAR RESOURCES LTD or give up 97.83% of portfolio value over 90 days.

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

SIEM OFFSHORE NEW  vs.  OAR RESOURCES LTD

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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

OAR RESOURCES LTD

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in OAR RESOURCES LTD are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, OAR RESOURCES reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SIEM OFFSHORE and OAR RESOURCES

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

The idea behind SIEM OFFSHORE NEW and OAR RESOURCES LTD 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.