Correlation Between Spring Valley and AKITA Drilling

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

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

Diversification Opportunities for Spring Valley and AKITA Drilling

-0.75

Correlation Coefficient

Spring Valley  AKITA Drilling

Pay attention - limited upside

The 3 months correlation between Spring and AKITA is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Spring Valley Acquisition and AKITA Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AKITA Drilling and Spring Valley 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 Spring Valley Acquisition are associated (or correlated) with AKITA Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AKITA Drilling has no effect on the direction of Spring Valley i.e., Spring Valley and AKITA Drilling go up and down completely randomly.

Pair Corralation between Spring Valley and AKITA Drilling

Assuming the 90 days horizon Spring Valley Acquisition is expected to generate 3.96 times more return on investment than AKITA Drilling. However, Spring Valley is 3.96 times more volatile than AKITA Drilling. It trades about 0.27 of its potential returns per unit of risk. AKITA Drilling is currently generating about -0.08 per unit of risk. If you would invest  15.00  in Spring Valley Acquisition on July 7, 2025 and sell it today you would earn a total of  40.00  from holding Spring Valley Acquisition or generate 266.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	90.77%
Values	Daily Returns

Spring Valley Acquisition  vs.  AKITA Drilling

Spring Valley Acquisition

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spring Valley Acquisition are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward indicators, Spring Valley reported solid returns over the last few months and may actually be approaching a breakup point.

AKITA Drilling

Risk-Adjusted Performance

Weakest

Over the last 90 days AKITA Drilling has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Spring Valley and AKITA Drilling

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

The idea behind Spring Valley Acquisition and AKITA Drilling 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.