Correlation Between Newpark Resources and Getty Images
Can any of the company-specific risk be diversified away by investing in both Newpark Resources and Getty Images 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 Getty Images into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newpark Resources and Getty Images Holdings, you can compare the effects of market volatilities on Newpark Resources and Getty Images 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 Getty Images. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newpark Resources and Getty Images.
Diversification Opportunities for Newpark Resources and Getty Images
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Newpark and Getty is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Newpark Resources and Getty Images Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Getty Images Holdings 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 Getty Images. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Getty Images Holdings has no effect on the direction of Newpark Resources i.e., Newpark Resources and Getty Images go up and down completely randomly.
Pair Corralation between Newpark Resources and Getty Images
Allowing for the 90-day total investment horizon Newpark Resources is expected to generate 0.57 times more return on investment than Getty Images. However, Newpark Resources is 1.74 times less risky than Getty Images. It trades about 0.28 of its potential returns per unit of risk. Getty Images Holdings is currently generating about -0.23 per unit of risk. If you would invest 681.00 in Newpark Resources on August 28, 2024 and sell it today you would earn a total of 136.00 from holding Newpark Resources or generate 19.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newpark Resources vs. Getty Images Holdings
Performance |
| Timeline |
| Newpark Resources |
| Getty Images Holdings |
Newpark Resources and Getty Images Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newpark Resources and Getty Images
The main advantage of trading using opposite Newpark Resources and Getty Images positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newpark Resources position performs unexpectedly, Getty Images 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 Getty Images will offset losses from the drop in Getty Images' long position.| Newpark Resources vs. ProPetro Holding Corp | Newpark Resources vs. RPC Inc | Newpark Resources vs. MRC Global | Newpark Resources vs. Expro Group Holdings |
| Getty Images vs. Twilio Inc | Getty Images vs. Baidu Inc | Getty Images vs. Snap Inc | Getty Images vs. ANGI Homeservices |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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