Correlation Between Schlumberger and MRC Global
Can any of the company-specific risk be diversified away by investing in both Schlumberger and MRC Global 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 Schlumberger and MRC Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schlumberger NV and MRC Global, you can compare the effects of market volatilities on Schlumberger and MRC Global 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 Schlumberger with a short position of MRC Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schlumberger and MRC Global.
Diversification Opportunities for Schlumberger and MRC Global
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Schlumberger and MRC is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Schlumberger NV and MRC Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRC Global and Schlumberger 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 Schlumberger NV are associated (or correlated) with MRC Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRC Global has no effect on the direction of Schlumberger i.e., Schlumberger and MRC Global go up and down completely randomly.
Pair Corralation between Schlumberger and MRC Global
Considering the 90-day investment horizon Schlumberger is expected to generate 2.43 times less return on investment than MRC Global. But when comparing it to its historical volatility, Schlumberger NV is 1.3 times less risky than MRC Global. It trades about 0.04 of its potential returns per unit of risk. MRC Global is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,261 in MRC Global on August 31, 2024 and sell it today you would earn a total of 135.00 from holding MRC Global or generate 10.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schlumberger NV vs. MRC Global
Performance |
| Timeline |
| Schlumberger NV |
| MRC Global |
Schlumberger and MRC Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schlumberger and MRC Global
The main advantage of trading using opposite Schlumberger and MRC Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schlumberger position performs unexpectedly, MRC Global 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 MRC Global will offset losses from the drop in MRC Global's long position.| Schlumberger vs. Baker Hughes Co | Schlumberger vs. NOV Inc | Schlumberger vs. Weatherford International PLC | Schlumberger vs. Tenaris SA ADR |
| MRC Global vs. NOV Inc | MRC Global vs. Ranger Energy Services | MRC Global vs. Oil States International | MRC Global 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |