Correlation Between CGG SA and NCS Multistage

Can any of the company-specific risk be diversified away by investing in both CGG SA and NCS Multistage 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 CGG SA and NCS Multistage into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CGG SA ADR and NCS Multistage Holdings, you can compare the effects of market volatilities on CGG SA and NCS Multistage 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 CGG SA with a short position of NCS Multistage. Check out your portfolio center. Please also check ongoing floating volatility patterns of CGG SA and NCS Multistage.

Diversification Opportunities for CGG SA and NCS Multistage

-0.47

Correlation Coefficient

CGG SA  NCS Multistage

Very good diversification

The 3 months correlation between CGG and NCS is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding CGG SA ADR and NCS Multistage Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCS Multistage Holdings and CGG SA 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 CGG SA ADR are associated (or correlated) with NCS Multistage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCS Multistage Holdings has no effect on the direction of CGG SA i.e., CGG SA and NCS Multistage go up and down completely randomly.

Pair Corralation between CGG SA and NCS Multistage

If you would invest  2,449  in NCS Multistage Holdings on October 24, 2024 and sell it today you would earn a total of  543.00  from holding NCS Multistage Holdings or generate 22.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.56%
Values	Daily Returns

CGG SA ADR  vs.  NCS Multistage Holdings

CGG SA ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CGG SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, CGG SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

NCS Multistage Holdings

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NCS Multistage Holdings are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, NCS Multistage displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CGG SA and NCS Multistage

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

The idea behind CGG SA ADR and NCS Multistage Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.