Correlation Between Raise Production and Newpark Resources

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Can any of the company-specific risk be diversified away by investing in both Raise Production and Newpark Resources 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 Raise Production and Newpark Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raise Production and Newpark Resources, you can compare the effects of market volatilities on Raise Production 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 Raise Production with a short position of Newpark Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raise Production and Newpark Resources.

Diversification Opportunities for Raise Production and Newpark Resources

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Raise and Newpark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Raise Production and Newpark Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newpark Resources and Raise Production 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 Raise Production 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 has no effect on the direction of Raise Production i.e., Raise Production and Newpark Resources go up and down completely randomly.

Pair Corralation between Raise Production and Newpark Resources

If you would invest  355.00  in Newpark Resources on December 30, 2023 and sell it today you would earn a total of  367.00  from holding Newpark Resources or generate 103.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Raise Production  vs.  Newpark Resources

 Performance 
       Timeline  
Raise Production 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Raise Production has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Raise Production is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
Newpark Resources 

Risk-Adjusted Performance

7 of 100

 
Low
 
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Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Newpark Resources are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Newpark Resources may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Raise Production and Newpark Resources Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Raise Production and Newpark Resources

The main advantage of trading using opposite Raise Production and Newpark Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raise Production position performs unexpectedly, Newpark Resources 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 Newpark Resources will offset losses from the drop in Newpark Resources' long position.
The idea behind Raise Production and Newpark Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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