Correlation Between NewMarket and Element Solutions
Can any of the company-specific risk be diversified away by investing in both NewMarket and Element Solutions 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 NewMarket and Element Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewMarket and Element Solutions, you can compare the effects of market volatilities on NewMarket and Element Solutions 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 NewMarket with a short position of Element Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewMarket and Element Solutions.
Diversification Opportunities for NewMarket and Element Solutions
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between NewMarket and Element is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding NewMarket and Element Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Solutions and NewMarket 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 NewMarket are associated (or correlated) with Element Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Solutions has no effect on the direction of NewMarket i.e., NewMarket and Element Solutions go up and down completely randomly.
Pair Corralation between NewMarket and Element Solutions
Considering the 90-day investment horizon NewMarket is expected to generate 0.82 times more return on investment than Element Solutions. However, NewMarket is 1.22 times less risky than Element Solutions. It trades about 0.09 of its potential returns per unit of risk. Element Solutions is currently generating about 0.06 per unit of risk. If you would invest 30,660 in NewMarket on August 24, 2024 and sell it today you would earn a total of 23,605 from holding NewMarket or generate 76.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewMarket vs. Element Solutions
Performance |
| Timeline |
| NewMarket |
| Element Solutions |
NewMarket and Element Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewMarket and Element Solutions
The main advantage of trading using opposite NewMarket and Element Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewMarket position performs unexpectedly, Element Solutions 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 Element Solutions will offset losses from the drop in Element Solutions' long position.| NewMarket vs. Eshallgo Class A | NewMarket vs. Amtech Systems | NewMarket vs. Gold Fields Ltd | NewMarket vs. Aegean Airlines SA |
| Element Solutions vs. Eshallgo Class A | Element Solutions vs. Amtech Systems | Element Solutions vs. Gold Fields Ltd | Element Solutions vs. Aegean Airlines SA |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |