Correlation Between Cabo Drilling and Spring Valley

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

By analyzing existing cross correlation between Cabo Drilling Corp and Spring Valley Acquisition, you can compare the effects of market volatilities on Cabo Drilling and Spring Valley 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 Cabo Drilling with a short position of Spring Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabo Drilling and Spring Valley.

Diversification Opportunities for Cabo Drilling and Spring Valley

0.0

Correlation Coefficient

Cabo Drilling  Spring Valley

Pay attention - limited upside

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

Pair Corralation between Cabo Drilling and Spring Valley

If you would invest  8.97  in Spring Valley Acquisition on May 1, 2025 and sell it today you would earn a total of  7.03  from holding Spring Valley Acquisition or generate 78.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	72.13%
Values	Daily Returns

Cabo Drilling Corp  vs.  Spring Valley Acquisition

Cabo Drilling Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cabo Drilling Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Cabo Drilling is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Spring Valley Acquisition

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Spring Valley Acquisition are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain forward indicators, Spring Valley reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cabo Drilling and Spring Valley

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

The idea behind Cabo Drilling Corp and Spring Valley Acquisition 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.