Correlation Between CSI Compressco and MRC Global

Can any of the company-specific risk be diversified away by investing in both CSI Compressco and MRC Global 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 CSI Compressco and MRC Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CSI Compressco LP and MRC Global, you can compare the effects of market volatilities on CSI Compressco and MRC Global 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 CSI Compressco with a short position of MRC Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSI Compressco and MRC Global.

Diversification Opportunities for CSI Compressco and MRC Global

0.25

Correlation Coefficient

CSI Compressco  MRC Global

Modest diversification

The 3 months correlation between CSI and MRC is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding CSI Compressco LP and MRC Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRC Global and CSI Compressco 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 CSI Compressco LP are associated (or correlated) with MRC Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRC Global has no effect on the direction of CSI Compressco i.e., CSI Compressco and MRC Global go up and down completely randomly.

Pair Corralation between CSI Compressco and MRC Global

If you would invest  962.00  in MRC Global on September 19, 2024 and sell it today you would earn a total of  308.00  from holding MRC Global or generate 32.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	0.34%
Values	Daily Returns

CSI Compressco LP  vs.  MRC Global

CSI Compressco LP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSI Compressco LP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, CSI Compressco is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

MRC Global

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MRC Global are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, MRC Global is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CSI Compressco and MRC Global

The main advantage of trading using opposite CSI Compressco and MRC Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSI Compressco position performs unexpectedly, MRC Global 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 MRC Global will offset losses from the drop in MRC Global's long position.

The idea behind CSI Compressco LP and MRC Global 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.

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.