Correlation Between Steady Safe and Rig Tenders

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

By analyzing existing cross correlation between Steady Safe TBK and Rig Tenders Tbk, you can compare the effects of market volatilities on Steady Safe and Rig Tenders 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 Steady Safe with a short position of Rig Tenders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steady Safe and Rig Tenders.

Diversification Opportunities for Steady Safe and Rig Tenders

-0.46

Correlation Coefficient

Steady Safe  Rig Tenders

Very good diversification

The 3 months correlation between Steady and Rig is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Steady Safe TBK and Rig Tenders Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rig Tenders Tbk and Steady Safe 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 Steady Safe TBK are associated (or correlated) with Rig Tenders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rig Tenders Tbk has no effect on the direction of Steady Safe i.e., Steady Safe and Rig Tenders go up and down completely randomly.

Pair Corralation between Steady Safe and Rig Tenders

Assuming the 90 days trading horizon Steady Safe TBK is expected to under-perform the Rig Tenders. In addition to that, Steady Safe is 1.8 times more volatile than Rig Tenders Tbk. It trades about -0.44 of its total potential returns per unit of risk. Rig Tenders Tbk is currently generating about 0.03 per unit of volatility. If you would invest  59,500  in Rig Tenders Tbk on August 31, 2024 and sell it today you would earn a total of  500.00  from holding Rig Tenders Tbk or generate 0.84% return on investment over 90 days.

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

Steady Safe TBK  vs.  Rig Tenders Tbk

Steady Safe TBK

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Steady Safe TBK are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Steady Safe may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Rig Tenders Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rig Tenders Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Rig Tenders is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Steady Safe and Rig Tenders

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

The idea behind Steady Safe TBK and Rig Tenders Tbk 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.