Correlation Between NL Industries and Eastern
Can any of the company-specific risk be diversified away by investing in both NL Industries and Eastern 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 NL Industries and Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NL Industries and Eastern Co, you can compare the effects of market volatilities on NL Industries and Eastern 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 NL Industries with a short position of Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of NL Industries and Eastern.
Diversification Opportunities for NL Industries and Eastern
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NL Industries and Eastern is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding NL Industries and Eastern Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern and NL Industries 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 NL Industries are associated (or correlated) with Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern has no effect on the direction of NL Industries i.e., NL Industries and Eastern go up and down completely randomly.
Pair Corralation between NL Industries and Eastern
Allowing for the 90-day total investment horizon NL Industries is expected to generate 1.48 times more return on investment than Eastern. However, NL Industries is 1.48 times more volatile than Eastern Co. It trades about 0.12 of its potential returns per unit of risk. Eastern Co is currently generating about 0.11 per unit of risk. If you would invest 766.00 in NL Industries on November 2, 2024 and sell it today you would earn a total of 53.00 from holding NL Industries or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NL Industries vs. Eastern Co
Performance |
| Timeline |
| NL Industries |
| Eastern |
NL Industries and Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NL Industries and Eastern
The main advantage of trading using opposite NL Industries and Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NL Industries position performs unexpectedly, Eastern 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 Eastern will offset losses from the drop in Eastern's long position.| NL Industries vs. Atos SE | NL Industries vs. Deveron Corp | NL Industries vs. Appen Limited | NL Industries vs. Atos Origin SA |
| Eastern vs. Timken Company | Eastern vs. Lincoln Electric Holdings | Eastern vs. Hillman Solutions Corp | Eastern vs. AB SKF |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |