Correlation Between NCS Multistage and MRC Global
Can any of the company-specific risk be diversified away by investing in both NCS Multistage and MRC Global 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 MRC Global 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 MRC Global, you can compare the effects of market volatilities on NCS Multistage and MRC Global 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 MRC Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of NCS Multistage and MRC Global.
Diversification Opportunities for NCS Multistage and MRC Global
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NCS and MRC is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NCS Multistage Holdings and MRC Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRC Global 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 MRC Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRC Global has no effect on the direction of NCS Multistage i.e., NCS Multistage and MRC Global go up and down completely randomly.
Pair Corralation between NCS Multistage and MRC Global
Given the investment horizon of 90 days NCS Multistage Holdings is expected to generate 1.15 times more return on investment than MRC Global. However, NCS Multistage is 1.15 times more volatile than MRC Global. It trades about 0.06 of its potential returns per unit of risk. MRC Global is currently generating about 0.04 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. MRC Global
Performance |
| Timeline |
| NCS Multistage Holdings |
| MRC Global |
NCS Multistage and MRC Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NCS Multistage and MRC Global
The main advantage of trading using opposite NCS Multistage and MRC Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NCS Multistage position performs unexpectedly, MRC Global 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 MRC Global will offset losses from the drop in MRC Global'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 |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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