Correlation Between Newpark Resources and Maanshan Iron
Can any of the company-specific risk be diversified away by investing in both Newpark Resources and Maanshan Iron 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 Maanshan Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newpark Resources and Maanshan Iron Steel, you can compare the effects of market volatilities on Newpark Resources and Maanshan Iron 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 Maanshan Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newpark Resources and Maanshan Iron.
Diversification Opportunities for Newpark Resources and Maanshan Iron
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Newpark and Maanshan is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Newpark Resources and Maanshan Iron Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maanshan Iron Steel 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 Maanshan Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maanshan Iron Steel has no effect on the direction of Newpark Resources i.e., Newpark Resources and Maanshan Iron go up and down completely randomly.
Pair Corralation between Newpark Resources and Maanshan Iron
Allowing for the 90-day total investment horizon Newpark Resources is expected to generate 0.72 times more return on investment than Maanshan Iron. However, Newpark Resources is 1.4 times less risky than Maanshan Iron. It trades about 0.33 of its potential returns per unit of risk. Maanshan Iron Steel is currently generating about -0.21 per unit of risk. If you would invest 673.00 in Newpark Resources on August 31, 2024 and sell it today you would earn a total of 156.00 from holding Newpark Resources or generate 23.18% 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. Maanshan Iron Steel
Performance |
| Timeline |
| Newpark Resources |
| Maanshan Iron Steel |
Newpark Resources and Maanshan Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newpark Resources and Maanshan Iron
The main advantage of trading using opposite Newpark Resources and Maanshan Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newpark Resources position performs unexpectedly, Maanshan Iron 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 Maanshan Iron will offset losses from the drop in Maanshan Iron's long position.| Newpark Resources vs. Now Inc | Newpark Resources vs. Enerflex | Newpark Resources vs. Bristow Group | Newpark Resources vs. Helix Energy Solutions |
| Maanshan Iron vs. Olympic Steel | Maanshan Iron vs. POSCO Holdings | Maanshan Iron vs. Steel Dynamics | Maanshan Iron vs. Universal Stainless Alloy |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |