Correlation Between Shelf Drilling and Clean Seas

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

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

Diversification Opportunities for Shelf Drilling and Clean Seas

-0.73

Correlation Coefficient

Shelf Drilling  Clean Seas

Pay attention - limited upside

The 3 months correlation between Shelf and Clean is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Shelf Drilling and Clean Seas Seafood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Seas Seafood and Shelf 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 Shelf Drilling are associated (or correlated) with Clean Seas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Seas Seafood has no effect on the direction of Shelf Drilling i.e., Shelf Drilling and Clean Seas go up and down completely randomly.

Pair Corralation between Shelf Drilling and Clean Seas

Assuming the 90 days trading horizon Shelf Drilling is expected to generate 2.67 times more return on investment than Clean Seas. However, Shelf Drilling is 2.67 times more volatile than Clean Seas Seafood. It trades about 0.17 of its potential returns per unit of risk. Clean Seas Seafood is currently generating about -0.18 per unit of risk. If you would invest  609.00  in Shelf Drilling on April 23, 2025 and sell it today you would earn a total of  301.00  from holding Shelf Drilling or generate 49.43% return on investment over 90 days.

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

Shelf Drilling  vs.  Clean Seas Seafood

Shelf Drilling

Risk-Adjusted Performance

Good

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

Clean Seas Seafood

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clean Seas Seafood has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in August 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Shelf Drilling and Clean Seas

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

The idea behind Shelf Drilling and Clean Seas Seafood 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.