Correlation Between Now and Helix Energy

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

By analyzing existing cross correlation between Now Inc and Helix Energy Solutions, you can compare the effects of market volatilities on Now and Helix Energy 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 Now with a short position of Helix Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Now and Helix Energy.

Diversification Opportunities for Now and Helix Energy

-0.58

Correlation Coefficient

Now  Helix Energy

Excellent diversification

The 3 months correlation between Now and Helix is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Now Inc and Helix Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helix Energy Solutions and Now 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 Now Inc are associated (or correlated) with Helix Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helix Energy Solutions has no effect on the direction of Now i.e., Now and Helix Energy go up and down completely randomly.

Pair Corralation between Now and Helix Energy

Given the investment horizon of 90 days Now Inc is expected to generate 1.31 times more return on investment than Helix Energy. However, Now is 1.31 times more volatile than Helix Energy Solutions. It trades about 0.15 of its potential returns per unit of risk. Helix Energy Solutions is currently generating about -0.01 per unit of risk. If you would invest  1,291  in Now Inc on December 27, 2024 and sell it today you would earn a total of  424.00  from holding Now Inc or generate 32.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Now Inc  vs.  Helix Energy Solutions

Now Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Now Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Now showed solid returns over the last few months and may actually be approaching a breakup point.

Helix Energy Solutions

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Now and Helix Energy

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

The idea behind Now Inc and Helix Energy Solutions 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.