Correlation Between Trican Well and Now
Can any of the company-specific risk be diversified away by investing in both Trican Well 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 Trican Well and Now into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trican Well Service and Now Inc, you can compare the effects of market volatilities on Trican Well 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 Trican Well with a short position of Now. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trican Well and Now.
Diversification Opportunities for Trican Well and Now
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trican and Now is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Trican Well Service and Now Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Now Inc and Trican Well 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 Trican Well Service 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 Trican Well i.e., Trican Well and Now go up and down completely randomly.
Pair Corralation between Trican Well and Now
Assuming the 90 days horizon Trican Well Service is expected to under-perform the Now. But the pink sheet apears to be less risky and, when comparing its historical volatility, Trican Well Service is 1.61 times less risky than Now. The pink sheet trades about -0.1 of its potential returns per unit of risk. The Now Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,407 in Now Inc on January 8, 2025 and sell it today you would earn a total of 35.00 from holding Now Inc or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Trican Well Service vs. Now Inc
Performance |
| Timeline |
| Trican Well Service |
| Now Inc |
Trican Well and Now Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trican Well and Now
The main advantage of trading using opposite Trican Well and Now positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trican Well 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.| Trican Well vs. Vantage Drilling International | Trican Well vs. Seadrill Limited | Trican Well vs. Noble plc | Trican Well vs. Borr Drilling |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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