Correlation Between NCS Multistage and One Group
Can any of the company-specific risk be diversified away by investing in both NCS Multistage and One Group 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 One Group 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 One Group Hospitality, you can compare the effects of market volatilities on NCS Multistage and One Group 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 One Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NCS Multistage and One Group.
Diversification Opportunities for NCS Multistage and One Group
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NCS and One is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding NCS Multistage Holdings and One Group Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Group Hospitality 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 One Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Group Hospitality has no effect on the direction of NCS Multistage i.e., NCS Multistage and One Group go up and down completely randomly.
Pair Corralation between NCS Multistage and One Group
Given the investment horizon of 90 days NCS Multistage Holdings is expected to generate 1.54 times more return on investment than One Group. However, NCS Multistage is 1.54 times more volatile than One Group Hospitality. It trades about 0.22 of its potential returns per unit of risk. One Group Hospitality is currently generating about 0.01 per unit of risk. If you would invest 2,334 in NCS Multistage Holdings on September 13, 2024 and sell it today you would earn a total of 516.00 from holding NCS Multistage Holdings or generate 22.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NCS Multistage Holdings vs. One Group Hospitality
Performance |
| Timeline |
| NCS Multistage Holdings |
| One Group Hospitality |
NCS Multistage and One Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NCS Multistage and One Group
The main advantage of trading using opposite NCS Multistage and One Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NCS Multistage position performs unexpectedly, One Group 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 One Group will offset losses from the drop in One Group'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 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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