Correlation Between Diageo PLC and NEWFIELD
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By analyzing existing cross correlation between Diageo PLC ADR and NEWFIELD EXPL 5375, you can compare the effects of market volatilities on Diageo PLC and NEWFIELD 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 Diageo PLC with a short position of NEWFIELD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diageo PLC and NEWFIELD.
Diversification Opportunities for Diageo PLC and NEWFIELD
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Diageo and NEWFIELD is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Diageo PLC ADR and NEWFIELD EXPL 5375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEWFIELD EXPL 5375 and Diageo PLC 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 Diageo PLC ADR are associated (or correlated) with NEWFIELD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEWFIELD EXPL 5375 has no effect on the direction of Diageo PLC i.e., Diageo PLC and NEWFIELD go up and down completely randomly.
Pair Corralation between Diageo PLC and NEWFIELD
Considering the 90-day investment horizon Diageo PLC ADR is expected to generate 2.53 times more return on investment than NEWFIELD. However, Diageo PLC is 2.53 times more volatile than NEWFIELD EXPL 5375. It trades about 0.23 of its potential returns per unit of risk. NEWFIELD EXPL 5375 is currently generating about -0.12 per unit of risk. If you would invest 11,915 in Diageo PLC ADR on September 14, 2024 and sell it today you would earn a total of 755.00 from holding Diageo PLC ADR or generate 6.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Diageo PLC ADR vs. NEWFIELD EXPL 5375
Performance |
| Timeline |
| Diageo PLC ADR |
| NEWFIELD EXPL 5375 |
Diageo PLC and NEWFIELD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diageo PLC and NEWFIELD
The main advantage of trading using opposite Diageo PLC and NEWFIELD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diageo PLC position performs unexpectedly, NEWFIELD 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 NEWFIELD will offset losses from the drop in NEWFIELD's long position.| Diageo PLC vs. Naked Wines plc | Diageo PLC vs. Andrew Peller Limited | Diageo PLC vs. Iconic Brands | Diageo PLC vs. Naked Wines plc |
| NEWFIELD vs. Diageo PLC ADR | NEWFIELD vs. Constellation Brands Class | NEWFIELD vs. Small Cap Premium | NEWFIELD vs. Molson Coors Brewing |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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