Correlation Between Hurco Companies and Newpark Resources
Can any of the company-specific risk be diversified away by investing in both Hurco Companies and Newpark Resources 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 Hurco Companies and Newpark Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hurco Companies and Newpark Resources, you can compare the effects of market volatilities on Hurco Companies and Newpark Resources 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 Hurco Companies with a short position of Newpark Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hurco Companies and Newpark Resources.
Diversification Opportunities for Hurco Companies and Newpark Resources
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hurco and Newpark is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hurco Companies and Newpark Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newpark Resources and Hurco Companies 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 Hurco Companies are associated (or correlated) with Newpark Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newpark Resources has no effect on the direction of Hurco Companies i.e., Hurco Companies and Newpark Resources go up and down completely randomly.
Pair Corralation between Hurco Companies and Newpark Resources
Given the investment horizon of 90 days Hurco Companies is expected to generate 11.55 times less return on investment than Newpark Resources. But when comparing it to its historical volatility, Hurco Companies is 1.15 times less risky than Newpark Resources. It trades about 0.01 of its potential returns per unit of risk. Newpark Resources is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 394.00 in Newpark Resources on August 28, 2024 and sell it today you would earn a total of 412.00 from holding Newpark Resources or generate 104.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hurco Companies vs. Newpark Resources
Performance |
| Timeline |
| Hurco Companies |
| Newpark Resources |
Hurco Companies and Newpark Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hurco Companies and Newpark Resources
The main advantage of trading using opposite Hurco Companies and Newpark Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hurco Companies position performs unexpectedly, Newpark Resources 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 Newpark Resources will offset losses from the drop in Newpark Resources' long position.| Hurco Companies vs. Aquagold International | Hurco Companies vs. Morningstar Unconstrained Allocation | Hurco Companies vs. High Yield Municipal Fund | Hurco Companies vs. Thrivent High Yield |
| Newpark Resources vs. ProPetro Holding Corp | Newpark Resources vs. RPC Inc | Newpark Resources vs. MRC Global | Newpark Resources vs. Expro Group Holdings |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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