Correlation Between Newpark Resources and CWC Energy
Can any of the company-specific risk be diversified away by investing in both Newpark Resources and CWC Energy 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 Newpark Resources and CWC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newpark Resources and CWC Energy Services, you can compare the effects of market volatilities on Newpark Resources and CWC Energy 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 Newpark Resources with a short position of CWC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newpark Resources and CWC Energy.
Diversification Opportunities for Newpark Resources and CWC Energy
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Newpark and CWC is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Newpark Resources and CWC Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CWC Energy Services and Newpark Resources 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 Newpark Resources are associated (or correlated) with CWC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CWC Energy Services has no effect on the direction of Newpark Resources i.e., Newpark Resources and CWC Energy go up and down completely randomly.
Pair Corralation between Newpark Resources and CWC Energy
If you would invest 681.00 in Newpark Resources on August 27, 2024 and sell it today you would earn a total of 125.00 from holding Newpark Resources or generate 18.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Newpark Resources vs. CWC Energy Services
Performance |
| Timeline |
| Newpark Resources |
| CWC Energy Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Newpark Resources and CWC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newpark Resources and CWC Energy
The main advantage of trading using opposite Newpark Resources and CWC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newpark Resources position performs unexpectedly, CWC Energy 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 CWC Energy will offset losses from the drop in CWC Energy's long position.| Newpark Resources vs. ProPetro Holding Corp | Newpark Resources vs. RPC Inc | Newpark Resources vs. MRC Global | Newpark Resources vs. Expro Group Holdings |
| CWC Energy vs. Petrofac Ltd ADR | CWC Energy vs. Saipem SpA | CWC Energy vs. SMG Industries | CWC Energy vs. Worley Parsons |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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