Correlation Between Newpark Resources and Profire Ene
Can any of the company-specific risk be diversified away by investing in both Newpark Resources and Profire Ene 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 Profire Ene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newpark Resources and Profire Ene, you can compare the effects of market volatilities on Newpark Resources and Profire Ene 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 Profire Ene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newpark Resources and Profire Ene.
Diversification Opportunities for Newpark Resources and Profire Ene
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Newpark and Profire is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Newpark Resources and Profire Ene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profire Ene 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 Profire Ene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profire Ene has no effect on the direction of Newpark Resources i.e., Newpark Resources and Profire Ene go up and down completely randomly.
Pair Corralation between Newpark Resources and Profire Ene
Allowing for the 90-day total investment horizon Newpark Resources is expected to generate 1.48 times less return on investment than Profire Ene. But when comparing it to its historical volatility, Newpark Resources is 1.73 times less risky than Profire Ene. It trades about 0.07 of its potential returns per unit of risk. Profire Ene is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 116.00 in Profire Ene on August 24, 2024 and sell it today you would earn a total of 136.00 from holding Profire Ene or generate 117.24% 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. Profire Ene
Performance |
| Timeline |
| Newpark Resources |
| Profire Ene |
Newpark Resources and Profire Ene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newpark Resources and Profire Ene
The main advantage of trading using opposite Newpark Resources and Profire Ene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newpark Resources position performs unexpectedly, Profire Ene 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 Profire Ene will offset losses from the drop in Profire Ene's long position.| Newpark Resources vs. Now Inc | Newpark Resources vs. Enerflex | Newpark Resources vs. Bristow Group | Newpark Resources vs. Forum Energy Technologies |
| Profire Ene vs. Enservco Co | Profire Ene vs. Nine Energy Service | Profire Ene vs. Enerflex | Profire Ene vs. Geospace 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |