Correlation Between ChampionX and NR Old
Can any of the company-specific risk be diversified away by investing in both ChampionX and NR Old 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 ChampionX and NR Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and NR Old, you can compare the effects of market volatilities on ChampionX and NR Old 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 ChampionX with a short position of NR Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and NR Old.
Diversification Opportunities for ChampionX and NR Old
Very good diversification
The 3 months correlation between ChampionX and NR Old is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and NR Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NR Old and ChampionX 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 ChampionX are associated (or correlated) with NR Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NR Old has no effect on the direction of ChampionX i.e., ChampionX and NR Old go up and down completely randomly.
Pair Corralation between ChampionX and NR Old
Considering the 90-day investment horizon ChampionX is expected to generate 0.84 times more return on investment than NR Old. However, ChampionX is 1.19 times less risky than NR Old. It trades about 0.0 of its potential returns per unit of risk. NR Old is currently generating about -0.04 per unit of risk. If you would invest 2,974 in ChampionX on November 2, 2024 and sell it today you would lose (65.00) from holding ChampionX or give up 2.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.73% |
| Values | Daily Returns |
ChampionX vs. NR Old
Performance |
| Timeline |
| ChampionX |
| NR Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
ChampionX and NR Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and NR Old
The main advantage of trading using opposite ChampionX and NR Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX position performs unexpectedly, NR Old 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 NR Old will offset losses from the drop in NR Old's long position.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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