Correlation Between Noble Plc and CONSOLIDATED

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

By analyzing existing cross correlation between Noble plc and CONSOLIDATED EDISON N, you can compare the effects of market volatilities on Noble Plc and CONSOLIDATED 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 Noble Plc with a short position of CONSOLIDATED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Plc and CONSOLIDATED.

Diversification Opportunities for Noble Plc and CONSOLIDATED

-0.25

Correlation Coefficient

Noble Plc  CONSOLIDATED

Very good diversification

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

Pair Corralation between Noble Plc and CONSOLIDATED

Allowing for the 90-day total investment horizon Noble plc is expected to under-perform the CONSOLIDATED. But the stock apears to be less risky and, when comparing its historical volatility, Noble plc is 1.08 times less risky than CONSOLIDATED. The stock trades about -0.09 of its potential returns per unit of risk. The CONSOLIDATED EDISON N is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8,103  in CONSOLIDATED EDISON N on September 15, 2024 and sell it today you would earn a total of  56.00  from holding CONSOLIDATED EDISON N or generate 0.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.87%
Values	Daily Returns

Noble plc  vs.  CONSOLIDATED EDISON N

Noble plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Noble plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

CONSOLIDATED EDISON

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CONSOLIDATED EDISON N are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CONSOLIDATED is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Noble Plc and CONSOLIDATED

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

The idea behind Noble plc and CONSOLIDATED EDISON N 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.