Correlation Between NOV and Expro Group
Can any of the company-specific risk be diversified away by investing in both NOV and Expro 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 NOV and Expro Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NOV Inc and Expro Group Holdings, you can compare the effects of market volatilities on NOV and Expro 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 NOV with a short position of Expro Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NOV and Expro Group.
Diversification Opportunities for NOV and Expro Group
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NOV and Expro is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding NOV Inc and Expro Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expro Group Holdings and NOV 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 NOV Inc are associated (or correlated) with Expro Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expro Group Holdings has no effect on the direction of NOV i.e., NOV and Expro Group go up and down completely randomly.
Pair Corralation between NOV and Expro Group
Considering the 90-day investment horizon NOV Inc is expected to under-perform the Expro Group. But the stock apears to be less risky and, when comparing its historical volatility, NOV Inc is 1.4 times less risky than Expro Group. The stock trades about -0.07 of its potential returns per unit of risk. The Expro Group Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,275 in Expro Group Holdings on November 4, 2024 and sell it today you would earn a total of 6.00 from holding Expro Group Holdings or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NOV Inc vs. Expro Group Holdings
Performance |
| Timeline |
| NOV Inc |
| Expro Group Holdings |
NOV and Expro Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NOV and Expro Group
The main advantage of trading using opposite NOV and Expro Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NOV position performs unexpectedly, Expro 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 Expro Group will offset losses from the drop in Expro Group's long position.The idea behind NOV Inc and Expro Group Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Expro Group vs. ChampionX | Expro Group vs. Ranger Energy Services | Expro Group vs. Cactus Inc | Expro Group vs. MRC Global |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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