Correlation Between Tourmaline Bio and Vantage Drilling

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

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

Diversification Opportunities for Tourmaline Bio and Vantage Drilling

-0.3

Correlation Coefficient

Tourmaline Bio  Vantage Drilling

Very good diversification

The 3 months correlation between Tourmaline and Vantage is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Tourmaline Bio and Vantage Drilling International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vantage Drilling Int and Tourmaline Bio 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 Tourmaline Bio are associated (or correlated) with Vantage Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vantage Drilling Int has no effect on the direction of Tourmaline Bio i.e., Tourmaline Bio and Vantage Drilling go up and down completely randomly.

Pair Corralation between Tourmaline Bio and Vantage Drilling

Given the investment horizon of 90 days Tourmaline Bio is expected to generate 66.62 times more return on investment than Vantage Drilling. However, Tourmaline Bio is 66.62 times more volatile than Vantage Drilling International. It trades about 0.17 of its potential returns per unit of risk. Vantage Drilling International is currently generating about -0.13 per unit of risk. If you would invest  1,552  in Tourmaline Bio on May 15, 2025 and sell it today you would earn a total of  596.00  from holding Tourmaline Bio or generate 38.4% return on investment over 90 days.

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

Tourmaline Bio  vs.  Vantage Drilling International

Tourmaline Bio

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tourmaline Bio are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting primary indicators, Tourmaline Bio disclosed solid returns over the last few months and may actually be approaching a breakup point.

Vantage Drilling Int

Risk-Adjusted Performance

Weakest

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

Pair Trading with Tourmaline Bio and Vantage Drilling

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

The idea behind Tourmaline Bio and Vantage Drilling International 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.