Correlation Between NXT Energy and Bristow
Can any of the company-specific risk be diversified away by investing in both NXT Energy and Bristow 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 NXT Energy and Bristow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NXT Energy Solutions and Bristow Group, you can compare the effects of market volatilities on NXT Energy and Bristow 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 NXT Energy with a short position of Bristow. Check out your portfolio center. Please also check ongoing floating volatility patterns of NXT Energy and Bristow.
Diversification Opportunities for NXT Energy and Bristow
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between NXT and Bristow is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding NXT Energy Solutions and Bristow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristow Group and NXT Energy 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 NXT Energy Solutions are associated (or correlated) with Bristow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristow Group has no effect on the direction of NXT Energy i.e., NXT Energy and Bristow go up and down completely randomly.
Pair Corralation between NXT Energy and Bristow
Assuming the 90 days horizon NXT Energy Solutions is expected to under-perform the Bristow. In addition to that, NXT Energy is 4.7 times more volatile than Bristow Group. It trades about -0.01 of its total potential returns per unit of risk. Bristow Group is currently generating about 0.23 per unit of volatility. If you would invest 3,387 in Bristow Group on August 27, 2024 and sell it today you would earn a total of 409.00 from holding Bristow Group or generate 12.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NXT Energy Solutions vs. Bristow Group
Performance |
| Timeline |
| NXT Energy Solutions |
| Bristow Group |
NXT Energy and Bristow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NXT Energy and Bristow
The main advantage of trading using opposite NXT Energy and Bristow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NXT Energy position performs unexpectedly, Bristow 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 Bristow will offset losses from the drop in Bristow's long position.| NXT Energy vs. Petroleo Brasileiro Petrobras | NXT Energy vs. Equinor ASA ADR | NXT Energy vs. Eni SpA ADR | NXT Energy vs. YPF Sociedad Anonima |
| Bristow vs. Oil States International | Bristow vs. Geospace Technologies | Bristow vs. Weatherford International PLC | Bristow vs. Enerflex |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stocks Directory Find actively traded stocks across global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |