Correlation Between Newpark Resources and LINE
Can any of the company-specific risk be diversified away by investing in both Newpark Resources and LINE 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 LINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newpark Resources and LINE Corporation, you can compare the effects of market volatilities on Newpark Resources and LINE 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 LINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newpark Resources and LINE.
Diversification Opportunities for Newpark Resources and LINE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Newpark and LINE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Newpark Resources and LINE Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINE 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 LINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINE has no effect on the direction of Newpark Resources i.e., Newpark Resources and LINE go up and down completely randomly.
Pair Corralation between Newpark Resources and LINE
If you would invest 657.00 in Newpark Resources on September 4, 2024 and sell it today you would earn a total of 182.00 from holding Newpark Resources or generate 27.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Newpark Resources vs. LINE Corp.
Performance |
| Timeline |
| Newpark Resources |
| LINE |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Newpark Resources and LINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newpark Resources and LINE
The main advantage of trading using opposite Newpark Resources and LINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newpark Resources position performs unexpectedly, LINE 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 LINE will offset losses from the drop in LINE's long position.| Newpark Resources vs. Now Inc | Newpark Resources vs. Enerflex | Newpark Resources vs. Bristow Group | Newpark Resources vs. Forum Energy Technologies |
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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