Correlation Between Nextier Oilfield and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both Nextier Oilfield and Baker Hughes 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 Nextier Oilfield and Baker Hughes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextier Oilfield Solutions and Baker Hughes Co, you can compare the effects of market volatilities on Nextier Oilfield and Baker Hughes 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 Nextier Oilfield with a short position of Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextier Oilfield and Baker Hughes.
Diversification Opportunities for Nextier Oilfield and Baker Hughes
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nextier and Baker is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Nextier Oilfield Solutions and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes and Nextier Oilfield 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 Nextier Oilfield Solutions are associated (or correlated) with Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of Nextier Oilfield i.e., Nextier Oilfield and Baker Hughes go up and down completely randomly.
Pair Corralation between Nextier Oilfield and Baker Hughes
Considering the 90-day investment horizon Nextier Oilfield Solutions is expected to generate 2.06 times more return on investment than Baker Hughes. However, Nextier Oilfield is 2.06 times more volatile than Baker Hughes Co. It trades about 0.05 of its potential returns per unit of risk. Baker Hughes Co is currently generating about 0.07 per unit of risk. If you would invest 926.00 in Nextier Oilfield Solutions on August 27, 2024 and sell it today you would earn a total of 209.00 from holding Nextier Oilfield Solutions or generate 22.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 31.85% |
| Values | Daily Returns |
Nextier Oilfield Solutions vs. Baker Hughes Co
Performance |
| Timeline |
| Nextier Oilfield Sol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Baker Hughes |
Nextier Oilfield and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextier Oilfield and Baker Hughes
The main advantage of trading using opposite Nextier Oilfield and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextier Oilfield position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.| Nextier Oilfield vs. ProPetro Holding Corp | Nextier Oilfield vs. Select Energy Services | Nextier Oilfield vs. Liberty Oilfield Services | Nextier Oilfield vs. Cactus Inc |
| Baker Hughes vs. Schlumberger NV | Baker Hughes vs. NOV Inc | Baker Hughes vs. Weatherford International PLC | Baker Hughes 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |