Correlation Between Newpark Resources and Vivakor
Can any of the company-specific risk be diversified away by investing in both Newpark Resources and Vivakor 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 Vivakor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Newpark Resources and Vivakor, you can compare the effects of market volatilities on Newpark Resources and Vivakor 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 Vivakor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Newpark Resources and Vivakor.
Diversification Opportunities for Newpark Resources and Vivakor
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Newpark and Vivakor is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Newpark Resources and Vivakor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivakor 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 Vivakor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivakor has no effect on the direction of Newpark Resources i.e., Newpark Resources and Vivakor go up and down completely randomly.
Pair Corralation between Newpark Resources and Vivakor
Allowing for the 90-day total investment horizon Newpark Resources is expected to generate 1.25 times less return on investment than Vivakor. But when comparing it to its historical volatility, Newpark Resources is 2.5 times less risky than Vivakor. It trades about 0.06 of its potential returns per unit of risk. Vivakor is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 165.00 in Vivakor on August 24, 2024 and sell it today you would earn a total of 3.00 from holding Vivakor or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newpark Resources vs. Vivakor
Performance |
| Timeline |
| Newpark Resources |
| Vivakor |
Newpark Resources and Vivakor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Newpark Resources and Vivakor
The main advantage of trading using opposite Newpark Resources and Vivakor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newpark Resources position performs unexpectedly, Vivakor 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 Vivakor will offset losses from the drop in Vivakor's long position.| Newpark Resources vs. Now Inc | Newpark Resources vs. Enerflex | Newpark Resources vs. Bristow Group | Newpark Resources vs. Forum Energy Technologies |
| Vivakor vs. Houston American Energy | Vivakor vs. Barnwell Industries | Vivakor vs. Mexco Energy | Vivakor vs. PHX Minerals |
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.
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