Two Equities Correlation Analysis
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This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.
Diversification Opportunities for Newpark Resources and NYSE Composite
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Newpark and NYSE is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Newpark Resources and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Newpark Resources 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 Newpark Resources are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Newpark Resources i.e., Newpark Resources and NYSE Composite go up and down completely randomly.
Pair Corralation between Newpark Resources and NYSE Composite
Allowing for the 90-day total investment horizon Newpark Resources is expected to generate 2.4 times more return on investment than NYSE Composite. However, Newpark Resources is 2.4 times more volatile than NYSE Composite. It trades about -0.03 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.11 per unit of risk. If you would invest 735.00 in Newpark Resources on January 25, 2024 and sell it today you would lose (9.00) from holding Newpark Resources or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Newpark Resources vs. NYSE Composite
Performance |
| Timeline |
Newpark Resources and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
Newpark Resources
Pair trading matchups for Newpark Resources
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Newpark Resources and NYSE Composite
The main advantage of trading using opposite Newpark Resources and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Newpark Resources position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.| Newpark Resources vs. Expro Group Holdings | Newpark Resources vs. Ranger Energy Services | Newpark Resources vs. MRC Global | Newpark Resources vs. Now Inc |
| NYSE Composite vs. Aduro Clean Technologies | NYSE Composite vs. Transphorm Technology | NYSE Composite vs. Advanced Micro Devices | NYSE Composite vs. IPG Photonics |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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