Correlation Between MRC Global and SOI Old
Can any of the company-specific risk be diversified away by investing in both MRC Global and SOI 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 MRC Global and SOI Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MRC Global and SOI Old, you can compare the effects of market volatilities on MRC Global and SOI 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 MRC Global with a short position of SOI Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of MRC Global and SOI Old.
Diversification Opportunities for MRC Global and SOI Old
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MRC and SOI is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding MRC Global and SOI Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOI Old 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 SOI Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOI Old has no effect on the direction of MRC Global i.e., MRC Global and SOI Old go up and down completely randomly.
Pair Corralation between MRC Global and SOI Old
Considering the 90-day investment horizon MRC Global is expected to generate 1.07 times less return on investment than SOI Old. But when comparing it to its historical volatility, MRC Global is 1.37 times less risky than SOI Old. It trades about 0.05 of its potential returns per unit of risk. SOI Old is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 826.00 in SOI Old on November 1, 2024 and sell it today you would earn a total of 326.00 from holding SOI Old or generate 39.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.17% |
| Values | Daily Returns |
MRC Global vs. SOI Old
Performance |
| Timeline |
| MRC Global |
| SOI Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MRC Global and SOI Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MRC Global and SOI Old
The main advantage of trading using opposite MRC Global and SOI Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRC Global position performs unexpectedly, SOI 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 SOI Old will offset losses from the drop in SOI Old'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 |
| SOI Old vs. Archrock | SOI Old vs. Bristow Group | SOI Old vs. MRC Global | SOI Old vs. Oil States International |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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