Correlation Between NYSE Composite and Schlumberger
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Schlumberger 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 NYSE Composite and Schlumberger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Schlumberger NV, you can compare the effects of market volatilities on NYSE Composite and Schlumberger 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 NYSE Composite with a short position of Schlumberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Schlumberger.
Diversification Opportunities for NYSE Composite and Schlumberger
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Schlumberger is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Schlumberger NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schlumberger NV and NYSE Composite 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 NYSE Composite are associated (or correlated) with Schlumberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schlumberger NV has no effect on the direction of NYSE Composite i.e., NYSE Composite and Schlumberger go up and down completely randomly.
Pair Corralation between NYSE Composite and Schlumberger
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.55 times less return on investment than Schlumberger. But when comparing it to its historical volatility, NYSE Composite is 3.17 times less risky than Schlumberger. It trades about 0.13 of its potential returns per unit of risk. Schlumberger NV is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,213 in Schlumberger NV on August 24, 2024 and sell it today you would earn a total of 193.00 from holding Schlumberger NV or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Schlumberger NV
Performance |
| Timeline |
NYSE Composite and Schlumberger Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Schlumberger NV
Pair trading matchups for Schlumberger
Pair Trading with NYSE Composite and Schlumberger
The main advantage of trading using opposite NYSE Composite and Schlumberger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Schlumberger 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 Schlumberger will offset losses from the drop in Schlumberger's long position.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Schlumberger vs. Baker Hughes Co | Schlumberger vs. NOV Inc | Schlumberger vs. Weatherford International PLC | Schlumberger vs. Tenaris SA ADR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |