Correlation Between Dawson Geophysical and Bristow

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

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

Diversification Opportunities for Dawson Geophysical and Bristow

-0.02

Correlation Coefficient

Dawson Geophysical  Bristow

Good diversification

The 3 months correlation between Dawson and Bristow is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Dawson Geophysical and Bristow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristow Group and Dawson Geophysical 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 Dawson Geophysical are associated (or correlated) with Bristow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristow Group has no effect on the direction of Dawson Geophysical i.e., Dawson Geophysical and Bristow go up and down completely randomly.

Pair Corralation between Dawson Geophysical and Bristow

Given the investment horizon of 90 days Dawson Geophysical is expected to generate 27.09 times less return on investment than Bristow. In addition to that, Dawson Geophysical is 1.73 times more volatile than Bristow Group. It trades about 0.01 of its total potential returns per unit of risk. Bristow Group is currently generating about 0.51 per unit of volatility. If you would invest  2,513  in Bristow Group on February 15, 2024 and sell it today you would earn a total of  1,074  from holding Bristow Group or generate 42.74% return on investment over 90 days.

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

Dawson Geophysical  vs.  Bristow Group

Dawson Geophysical

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dawson Geophysical are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Dawson Geophysical displayed solid returns over the last few months and may actually be approaching a breakup point.

Bristow Group

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bristow Group are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Bristow disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dawson Geophysical and Bristow

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

The idea behind Dawson Geophysical and Bristow Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.