Correlation Between MRC Global and Calfrac Well
Can any of the company-specific risk be diversified away by investing in both MRC Global and Calfrac Well 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 MRC Global and Calfrac Well into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MRC Global and Calfrac Well Services, you can compare the effects of market volatilities on MRC Global and Calfrac Well 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 MRC Global with a short position of Calfrac Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of MRC Global and Calfrac Well.
Diversification Opportunities for MRC Global and Calfrac Well
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MRC and Calfrac is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding MRC Global and Calfrac Well Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calfrac Well Services and MRC Global 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 MRC Global are associated (or correlated) with Calfrac Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calfrac Well Services has no effect on the direction of MRC Global i.e., MRC Global and Calfrac Well go up and down completely randomly.
Pair Corralation between MRC Global and Calfrac Well
Considering the 90-day investment horizon MRC Global is expected to generate 0.51 times more return on investment than Calfrac Well. However, MRC Global is 1.95 times less risky than Calfrac Well. It trades about 0.4 of its potential returns per unit of risk. Calfrac Well Services is currently generating about 0.03 per unit of risk. If you would invest 1,261 in MRC Global on October 20, 2024 and sell it today you would earn a total of 182.00 from holding MRC Global or generate 14.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MRC Global vs. Calfrac Well Services
Performance |
| Timeline |
| MRC Global |
| Calfrac Well Services |
MRC Global and Calfrac Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MRC Global and Calfrac Well
The main advantage of trading using opposite MRC Global and Calfrac Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRC Global position performs unexpectedly, Calfrac Well 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 Calfrac Well will offset losses from the drop in Calfrac Well's long position.| MRC Global vs. NOV Inc | MRC Global vs. Ranger Energy Services | MRC Global vs. Oil States International | MRC Global vs. Geospace Technologies |
| Calfrac Well vs. Greenway Technologies | Calfrac Well vs. Akastor ASA | Calfrac Well vs. Auri Inc | Calfrac Well vs. Us Energy Initiative |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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