Correlation Between MRC Global and Team
Can any of the company-specific risk be diversified away by investing in both MRC Global and Team 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 Team into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MRC Global and Team Inc, you can compare the effects of market volatilities on MRC Global and Team 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 Team. Check out your portfolio center. Please also check ongoing floating volatility patterns of MRC Global and Team.
Diversification Opportunities for MRC Global and Team
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between MRC and Team is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding MRC Global and Team Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Team Inc 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 Team. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Team Inc has no effect on the direction of MRC Global i.e., MRC Global and Team go up and down completely randomly.
Pair Corralation between MRC Global and Team
Considering the 90-day investment horizon MRC Global is expected to generate 4.27 times less return on investment than Team. But when comparing it to its historical volatility, MRC Global is 2.66 times less risky than Team. It trades about 0.05 of its potential returns per unit of risk. Team Inc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 548.00 in Team Inc on August 24, 2024 and sell it today you would earn a total of 1,208 from holding Team Inc or generate 220.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MRC Global vs. Team Inc
Performance |
| Timeline |
| MRC Global |
| Team Inc |
MRC Global and Team Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MRC Global and Team
The main advantage of trading using opposite MRC Global and Team positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRC Global position performs unexpectedly, Team 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 Team will offset losses from the drop in Team'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 |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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