Correlation Between NCS Multistage and Now
Can any of the company-specific risk be diversified away by investing in both NCS Multistage and Now 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 NCS Multistage and Now into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NCS Multistage Holdings and Now Inc, you can compare the effects of market volatilities on NCS Multistage and Now 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 NCS Multistage with a short position of Now. Check out your portfolio center. Please also check ongoing floating volatility patterns of NCS Multistage and Now.
Diversification Opportunities for NCS Multistage and Now
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NCS and Now is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding NCS Multistage Holdings and Now Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Now Inc and NCS Multistage 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 NCS Multistage Holdings are associated (or correlated) with Now. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Now Inc has no effect on the direction of NCS Multistage i.e., NCS Multistage and Now go up and down completely randomly.
Pair Corralation between NCS Multistage and Now
Given the investment horizon of 90 days NCS Multistage Holdings is expected to generate 1.16 times more return on investment than Now. However, NCS Multistage is 1.16 times more volatile than Now Inc. It trades about 0.06 of its potential returns per unit of risk. Now Inc is currently generating about 0.05 per unit of risk. If you would invest 1,775 in NCS Multistage Holdings on September 2, 2024 and sell it today you would earn a total of 319.00 from holding NCS Multistage Holdings or generate 17.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
NCS Multistage Holdings vs. Now Inc
Performance |
| Timeline |
| NCS Multistage Holdings |
| Now Inc |
NCS Multistage and Now Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NCS Multistage and Now
The main advantage of trading using opposite NCS Multistage and Now positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NCS Multistage position performs unexpectedly, Now 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 Now will offset losses from the drop in Now's long position.| NCS Multistage vs. Bri Chem Corp | NCS Multistage vs. NXT Energy Solutions | NCS Multistage vs. Bristow Group | NCS Multistage vs. Natural Gas Services |
| Now vs. Oil States International | Now vs. Oceaneering International | Now vs. Geospace Technologies | Now vs. Newpark Resources |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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