Correlation Between GOLD FIELDS and SIEM OFFSHORE

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

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

Diversification Opportunities for GOLD FIELDS and SIEM OFFSHORE

-0.39

Correlation Coefficient

GOLD FIELDS  SIEM OFFSHORE

Very good diversification

The 3 months correlation between GOLD and SIEM is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding GOLD FIELDS and SIEM OFFSHORE NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEM OFFSHORE NEW and GOLD FIELDS 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 GOLD FIELDS are associated (or correlated) with SIEM OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEM OFFSHORE NEW has no effect on the direction of GOLD FIELDS i.e., GOLD FIELDS and SIEM OFFSHORE go up and down completely randomly.

Pair Corralation between GOLD FIELDS and SIEM OFFSHORE

Assuming the 90 days trading horizon GOLD FIELDS is expected to generate 0.93 times more return on investment than SIEM OFFSHORE. However, GOLD FIELDS is 1.08 times less risky than SIEM OFFSHORE. It trades about 0.01 of its potential returns per unit of risk. SIEM OFFSHORE NEW is currently generating about -0.03 per unit of risk. If you would invest  1,805  in GOLD FIELDS on February 13, 2025 and sell it today you would lose (15.00) from holding GOLD FIELDS or give up 0.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

GOLD FIELDS  vs.  SIEM OFFSHORE NEW

GOLD FIELDS

Risk-Adjusted Performance

Weak

Over the last 90 days GOLD FIELDS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, GOLD FIELDS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

SIEM OFFSHORE NEW

Risk-Adjusted Performance

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 nearly stable technical indicators, SIEM OFFSHORE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GOLD FIELDS and SIEM OFFSHORE

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

The idea behind GOLD FIELDS and SIEM OFFSHORE NEW 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.