Correlation Between New Oriental and Schlumberger
Can any of the company-specific risk be diversified away by investing in both New Oriental and Schlumberger 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 New Oriental and Schlumberger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Oriental Education and Schlumberger Limited, you can compare the effects of market volatilities on New Oriental and Schlumberger 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 New Oriental with a short position of Schlumberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Oriental and Schlumberger.
Diversification Opportunities for New Oriental and Schlumberger
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between New and Schlumberger is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding New Oriental Education and Schlumberger Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schlumberger Limited and New Oriental 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 New Oriental Education are associated (or correlated) with Schlumberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schlumberger Limited has no effect on the direction of New Oriental i.e., New Oriental and Schlumberger go up and down completely randomly.
Pair Corralation between New Oriental and Schlumberger
If you would invest 126,600 in New Oriental Education on October 9, 2024 and sell it today you would earn a total of 0.00 from holding New Oriental Education or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
New Oriental Education vs. Schlumberger Limited
Performance |
Timeline |
New Oriental Education |
Schlumberger Limited |
New Oriental and Schlumberger Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with New Oriental and Schlumberger
The main advantage of trading using opposite New Oriental and Schlumberger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Oriental position performs unexpectedly, Schlumberger 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 Schlumberger will offset losses from the drop in Schlumberger's long position.New Oriental vs. Martin Marietta Materials | New Oriental vs. Verizon Communications | New Oriental vs. Southwest Airlines | New Oriental vs. The Bank of |
Schlumberger vs. Genworth Financial | Schlumberger vs. Monster Beverage Corp | Schlumberger vs. Applied Materials | Schlumberger vs. First Majestic Silver |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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