Correlation Between MRC Global and Nextier Oilfield
Can any of the company-specific risk be diversified away by investing in both MRC Global and Nextier Oilfield 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 Nextier Oilfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MRC Global and Nextier Oilfield Solutions, you can compare the effects of market volatilities on MRC Global and Nextier Oilfield 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 Nextier Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of MRC Global and Nextier Oilfield.
Diversification Opportunities for MRC Global and Nextier Oilfield
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MRC and Nextier is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding MRC Global and Nextier Oilfield Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextier Oilfield Sol 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 Nextier Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextier Oilfield Sol has no effect on the direction of MRC Global i.e., MRC Global and Nextier Oilfield go up and down completely randomly.
Pair Corralation between MRC Global and Nextier Oilfield
If you would invest 1,226 in MRC Global on August 27, 2024 and sell it today you would earn a total of 180.00 from holding MRC Global or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
MRC Global vs. Nextier Oilfield Solutions
Performance |
| Timeline |
| MRC Global |
| Nextier Oilfield Sol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MRC Global and Nextier Oilfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MRC Global and Nextier Oilfield
The main advantage of trading using opposite MRC Global and Nextier Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRC Global position performs unexpectedly, Nextier Oilfield 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 Nextier Oilfield will offset losses from the drop in Nextier Oilfield'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 |
| Nextier Oilfield vs. ProPetro Holding Corp | Nextier Oilfield vs. Select Energy Services | Nextier Oilfield vs. Liberty Oilfield Services | Nextier Oilfield vs. Cactus Inc |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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