Correlation Between Subsea 7 and Us Energy

Can any of the company-specific risk be diversified away by investing in both Subsea 7 and Us Energy 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 Subsea 7 and Us Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Subsea 7 SA and Us Energy Initiative, you can compare the effects of market volatilities on Subsea 7 and Us Energy 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 Subsea 7 with a short position of Us Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Subsea 7 and Us Energy.

Diversification Opportunities for Subsea 7 and Us Energy

0.0

Correlation Coefficient

Subsea 7  Us Energy

Pay attention - limited upside

The 3 months correlation between Subsea and USEI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Subsea 7 SA and Us Energy Initiative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Energy Initiative and Subsea 7 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 Subsea 7 SA are associated (or correlated) with Us Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Energy Initiative has no effect on the direction of Subsea 7 i.e., Subsea 7 and Us Energy go up and down completely randomly.

Pair Corralation between Subsea 7 and Us Energy

If you would invest  0.00  in Us Energy Initiative on July 20, 2024 and sell it today you would earn a total of  0.00  from holding Us Energy Initiative or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Subsea 7 SA  vs.  Us Energy Initiative

Subsea 7 SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Subsea 7 SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Subsea 7 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Us Energy Initiative

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Us Energy Initiative has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Us Energy is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Subsea 7 and Us Energy

The main advantage of trading using opposite Subsea 7 and Us Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Subsea 7 position performs unexpectedly, Us Energy 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 Us Energy will offset losses from the drop in Us Energy's long position.

The idea behind Subsea 7 SA and Us Energy Initiative 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 Commodity Directory module to find actively traded commodities issued by global exchanges.