Correlation Between Noble Plc and Granite Falls
Can any of the company-specific risk be diversified away by investing in both Noble Plc and Granite Falls 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 Noble Plc and Granite Falls into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Noble plc and Granite Falls Energy, you can compare the effects of market volatilities on Noble Plc and Granite Falls 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 Noble Plc with a short position of Granite Falls. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Plc and Granite Falls.
Diversification Opportunities for Noble Plc and Granite Falls
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Noble and Granite is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Noble plc and Granite Falls Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Falls Energy and Noble Plc 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 Noble plc are associated (or correlated) with Granite Falls. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Falls Energy has no effect on the direction of Noble Plc i.e., Noble Plc and Granite Falls go up and down completely randomly.
Pair Corralation between Noble Plc and Granite Falls
Allowing for the 90-day total investment horizon Noble plc is expected to generate 1.69 times more return on investment than Granite Falls. However, Noble Plc is 1.69 times more volatile than Granite Falls Energy. It trades about 0.01 of its potential returns per unit of risk. Granite Falls Energy is currently generating about -0.03 per unit of risk. If you would invest 3,366 in Noble plc on September 4, 2024 and sell it today you would earn a total of 21.00 from holding Noble plc or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Noble plc vs. Granite Falls Energy
Performance |
| Timeline |
| Noble plc |
| Granite Falls Energy |
Noble Plc and Granite Falls Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Noble Plc and Granite Falls
The main advantage of trading using opposite Noble Plc and Granite Falls positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Plc position performs unexpectedly, Granite Falls 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 Granite Falls will offset losses from the drop in Granite Falls' long position.| Noble Plc vs. Precision Drilling | Noble Plc vs. Sable Offshore Corp | Noble Plc vs. Patterson UTI Energy | Noble Plc vs. Seadrill Limited |
| Granite Falls vs. Asbury Automotive Group | Granite Falls vs. Getty Realty | Granite Falls vs. Grocery Outlet Holding | Granite Falls vs. Tenaris SA ADR |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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