Correlation Between Brooge Holdings and NCS Multistage
Can any of the company-specific risk be diversified away by investing in both Brooge Holdings and NCS Multistage 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 Brooge Holdings and NCS Multistage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brooge Holdings and NCS Multistage Holdings, you can compare the effects of market volatilities on Brooge Holdings and NCS Multistage 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 Brooge Holdings with a short position of NCS Multistage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brooge Holdings and NCS Multistage.
Diversification Opportunities for Brooge Holdings and NCS Multistage
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Brooge and NCS is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Brooge Holdings and NCS Multistage Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCS Multistage Holdings and Brooge Holdings 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 Brooge Holdings are associated (or correlated) with NCS Multistage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCS Multistage Holdings has no effect on the direction of Brooge Holdings i.e., Brooge Holdings and NCS Multistage go up and down completely randomly.
Pair Corralation between Brooge Holdings and NCS Multistage
Given the investment horizon of 90 days Brooge Holdings is expected to generate 1.56 times more return on investment than NCS Multistage. However, Brooge Holdings is 1.56 times more volatile than NCS Multistage Holdings. It trades about 0.29 of its potential returns per unit of risk. NCS Multistage Holdings is currently generating about 0.22 per unit of risk. If you would invest 119.00 in Brooge Holdings on September 13, 2024 and sell it today you would earn a total of 60.00 from holding Brooge Holdings or generate 50.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brooge Holdings vs. NCS Multistage Holdings
Performance |
| Timeline |
| Brooge Holdings |
| NCS Multistage Holdings |
Brooge Holdings and NCS Multistage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brooge Holdings and NCS Multistage
The main advantage of trading using opposite Brooge Holdings and NCS Multistage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brooge Holdings position performs unexpectedly, NCS Multistage 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 NCS Multistage will offset losses from the drop in NCS Multistage's long position.| Brooge Holdings vs. Teekay | Brooge Holdings vs. Targa Resources | Brooge Holdings vs. Teekay Tankers | Brooge Holdings vs. Dynagas LNG Partners |
| NCS Multistage vs. Bri Chem Corp | NCS Multistage vs. NXT Energy Solutions | NCS Multistage vs. Bristow Group | NCS Multistage vs. Natural Gas Services |
Check out your portfolio center.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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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