Correlation Between Shawcor and Newpark Resources
Can any of the company-specific risk be diversified away by investing in both Shawcor and Newpark Resources 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 Shawcor and Newpark Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shawcor and Newpark Resources, you can compare the effects of market volatilities on Shawcor and Newpark Resources 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 Shawcor with a short position of Newpark Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shawcor and Newpark Resources.
Diversification Opportunities for Shawcor and Newpark Resources
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shawcor and Newpark is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Shawcor and Newpark Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newpark Resources and Shawcor 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 Shawcor are associated (or correlated) with Newpark Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newpark Resources has no effect on the direction of Shawcor i.e., Shawcor and Newpark Resources go up and down completely randomly.
Pair Corralation between Shawcor and Newpark Resources
If you would invest 725.00 in Newpark Resources on September 12, 2024 and sell it today you would earn a total of 57.00 from holding Newpark Resources or generate 7.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Shawcor vs. Newpark Resources
Performance |
| Timeline |
| Shawcor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Newpark Resources |
Shawcor and Newpark Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shawcor and Newpark Resources
The main advantage of trading using opposite Shawcor and Newpark Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shawcor position performs unexpectedly, Newpark Resources 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 Newpark Resources will offset losses from the drop in Newpark Resources' long position.| Shawcor vs. STEP Energy Services | Shawcor vs. Total Energy Services | Shawcor vs. Trican Well Service | Shawcor vs. High Arctic Energy |
| Newpark Resources vs. Schlumberger NV | Newpark Resources vs. Weatherford International PLC | Newpark Resources vs. Tenaris SA ADR | Newpark Resources vs. Halliburton |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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