Correlation Between NorAm Drilling and Polaris Media

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

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

Diversification Opportunities for NorAm Drilling and Polaris Media

0.5

Correlation Coefficient

NorAm Drilling  Polaris Media

Very weak diversification

The 3 months correlation between NorAm and Polaris is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding NorAm Drilling AS and Polaris Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polaris Media and NorAm 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 NorAm Drilling AS are associated (or correlated) with Polaris Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polaris Media has no effect on the direction of NorAm Drilling i.e., NorAm Drilling and Polaris Media go up and down completely randomly.

Pair Corralation between NorAm Drilling and Polaris Media

Assuming the 90 days trading horizon NorAm Drilling AS is expected to under-perform the Polaris Media. But the stock apears to be less risky and, when comparing its historical volatility, NorAm Drilling AS is 1.12 times less risky than Polaris Media. The stock trades about -0.11 of its potential returns per unit of risk. The Polaris Media is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  6,678  in Polaris Media on April 24, 2025 and sell it today you would lose (528.00) from holding Polaris Media or give up 7.91% of portfolio value over 90 days.

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

NorAm Drilling AS  vs.  Polaris Media

NorAm Drilling AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days NorAm Drilling AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Polaris Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Polaris Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with NorAm Drilling and Polaris Media

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

The idea behind NorAm Drilling AS and Polaris Media 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..