Correlation Between Newpark Resources and MYR
Can any of the company-specific risk be diversified away by investing in both Newpark Resources and MYR 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 MYR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newpark Resources and MYR Group, you can compare the effects of market volatilities on Newpark Resources and MYR 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 MYR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newpark Resources and MYR.
Diversification Opportunities for Newpark Resources and MYR
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Newpark and MYR is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Newpark Resources and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR Group 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 MYR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYR Group has no effect on the direction of Newpark Resources i.e., Newpark Resources and MYR go up and down completely randomly.
Pair Corralation between Newpark Resources and MYR
Allowing for the 90-day total investment horizon Newpark Resources is expected to generate 1.0 times more return on investment than MYR. However, Newpark Resources is 1.0 times less risky than MYR. It trades about 0.06 of its potential returns per unit of risk. MYR Group is currently generating about 0.05 per unit of risk. If you would invest 439.00 in Newpark Resources on August 27, 2024 and sell it today you would earn a total of 353.00 from holding Newpark Resources or generate 80.41% 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. MYR Group
Performance |
| Timeline |
| Newpark Resources |
| MYR Group |
Newpark Resources and MYR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newpark Resources and MYR
The main advantage of trading using opposite Newpark Resources and MYR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newpark Resources position performs unexpectedly, MYR 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 MYR will offset losses from the drop in MYR'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 |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |