Pair Correlation Between DOW and Newpark Resources

This module allows you to analyze existing cross correlation between DOW and Newpark Resources Inc. You can compare the effects of market volatilities on DOW 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 DOW with a short position of Newpark Resources. See also your portfolio center. Please also check ongoing floating volatility patterns of DOW and Newpark Resources.
 Time Horizon     30 Days    Login   to change
Symbolsvs
 DOW  vs   Newpark Resources Inc
 Performance (%) 
      Timeline 

Pair Volatility

Given the investment horizon of 30 days, DOW is expected to generate 1.81 times less return on investment than Newpark Resources. But when comparing it to its historical volatility, DOW is 5.9 times less risky than Newpark Resources. It trades about 0.6 of its potential returns per unit of risk. Newpark Resources Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  865  in Newpark Resources Inc on December 22, 2017 and sell it today you would earn a total of  75  from holding Newpark Resources Inc or generate 8.67% return on investment over 30 days.

Correlation Coefficient

Pair Corralation between DOW and Newpark Resources
0.89

Parameters

Time Period1 Month [change]
DirectionPositive 
StrengthStrong
Accuracy94.74%
ValuesDaily Returns

Diversification

Very poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding DOW and Newpark Resources Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Newpark Resources Inc and DOW 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 DOW 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 Inc has no effect on the direction of DOW i.e. DOW and Newpark Resources go up and down completely randomly.
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Comparative Volatility

 Predicted Return Density 
      Returns