Correlation Between NCR Corp and Balchem

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

By analyzing existing cross correlation between NCR Corp Pref and Balchem, you can compare the effects of market volatilities on NCR Corp and Balchem 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 NCR Corp with a short position of Balchem. Check out your portfolio center. Please also check ongoing floating volatility patterns of NCR Corp and Balchem.

Diversification Opportunities for NCR Corp and Balchem

0.0

Correlation Coefficient

NCR Corp  Balchem

Pay attention - limited upside

The 3 months correlation between NCR and Balchem is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NCR Corp Pref and Balchem in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balchem and NCR 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 NCR Corp Pref are associated (or correlated) with Balchem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balchem has no effect on the direction of NCR Corp i.e., NCR Corp and Balchem go up and down completely randomly.

Pair Corralation between NCR Corp and Balchem

If you would invest  16,463  in Balchem on December 20, 2024 and sell it today you would earn a total of  61.00  from holding Balchem or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NCR Corp Pref  vs.  Balchem

NCR Corp Pref

Risk-Adjusted Performance

Very Weak

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

Balchem

Risk-Adjusted Performance

Very Weak

Over the last 90 days Balchem has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Balchem is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with NCR Corp and Balchem

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

The idea behind NCR Corp Pref and Balchem 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.