Correlation Between Noble Corp and Owens Corning

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

Diversification Opportunities for Noble Corp and Owens Corning

0.59
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Noble and Owens is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Noble Corp Plc and Owens Corning in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Owens Corning and Noble Corp 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 Noble Corp Plc are associated (or correlated) with Owens Corning. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Owens Corning has no effect on the direction of Noble Corp i.e., Noble Corp and Owens Corning go up and down completely randomly.

Pair Corralation between Noble Corp and Owens Corning

Allowing for the 90-day total investment horizon Noble Corp Plc is expected to generate 1.4 times more return on investment than Owens Corning. However, Noble Corp is 1.4 times more volatile than Owens Corning. It trades about 0.03 of its potential returns per unit of risk. Owens Corning is currently generating about 0.02 per unit of risk. If you would invest  2,475  in Noble Corp Plc on June 27, 2022 and sell it today you would earn a total of  311.00  from holding Noble Corp Plc or generate 12.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy65.73%
ValuesDaily Returns

Noble Corp Plc  vs.  Owens Corning

 Performance (%) 
       Timeline  
Noble Corp Plc 
Noble Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Noble Corp Plc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Noble Corp is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Noble Price Channel

Owens Corning 
Owens Performance
0 of 100
Over the last 90 days Owens Corning has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Owens Corning is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Owens Price Channel

Noble Corp and Owens Corning Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Noble Corp and Owens Corning

The main advantage of trading using opposite Noble Corp and Owens Corning positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Corp position performs unexpectedly, Owens Corning 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 Owens Corning will offset losses from the drop in Owens Corning's long position.
Noble Corp vs. Industrias Bachoco SA
The idea behind Noble Corp Plc and Owens Corning 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.
Owens Corning vs. BUSHVELD MINERALS LTD
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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