Correlation Between Schlumberger and NOW
Can any of the company-specific risk be diversified away by investing in both Schlumberger and NOW 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 NOW into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schlumberger Limited and NOW Inc, you can compare the effects of market volatilities on Schlumberger and NOW 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 NOW. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schlumberger and NOW.
Diversification Opportunities for Schlumberger and NOW
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Schlumberger and NOW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Schlumberger Limited and NOW Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOW Inc 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 Limited are associated (or correlated) with NOW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOW Inc has no effect on the direction of Schlumberger i.e., Schlumberger and NOW go up and down completely randomly.
Pair Corralation between Schlumberger and NOW
If you would invest 81,300 in Schlumberger Limited on August 31, 2024 and sell it today you would earn a total of 9,053 from holding Schlumberger Limited or generate 11.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Schlumberger Limited vs. NOW Inc
Performance |
| Timeline |
| Schlumberger Limited |
| NOW Inc |
Schlumberger and NOW Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schlumberger and NOW
The main advantage of trading using opposite Schlumberger and NOW positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schlumberger position performs unexpectedly, NOW 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 NOW will offset losses from the drop in NOW's long position.| Schlumberger vs. Hoteles City Express | Schlumberger vs. Taiwan Semiconductor Manufacturing | Schlumberger vs. Cognizant Technology Solutions | Schlumberger vs. United Airlines Holdings |
| NOW vs. First Majestic Silver | NOW vs. FibraHotel | NOW vs. Ameriprise Financial | NOW vs. Capital One Financial |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |