Correlation Between Noble Plc and 26443CAA1

Can any of the company-specific risk be diversified away by investing in both Noble Plc and 26443CAA1 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 26443CAA1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Noble plc and DUKE UNIV HEALTH, you can compare the effects of market volatilities on Noble Plc and 26443CAA1 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 26443CAA1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Plc and 26443CAA1.

Diversification Opportunities for Noble Plc and 26443CAA1

-0.17

Correlation Coefficient

Noble Plc  26443CAA1

Good diversification

The 3 months correlation between Noble and 26443CAA1 is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Noble plc and DUKE UNIV HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE UNIV HEALTH 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 26443CAA1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE UNIV HEALTH has no effect on the direction of Noble Plc i.e., Noble Plc and 26443CAA1 go up and down completely randomly.

Pair Corralation between Noble Plc and 26443CAA1

Allowing for the 90-day total investment horizon Noble plc is expected to generate 1.72 times more return on investment than 26443CAA1. However, Noble Plc is 1.72 times more volatile than DUKE UNIV HEALTH. It trades about 0.04 of its potential returns per unit of risk. DUKE UNIV HEALTH is currently generating about 0.01 per unit of risk. If you would invest  3,168  in Noble plc on October 24, 2024 and sell it today you would earn a total of  148.00  from holding Noble plc or generate 4.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	48.33%
Values	Daily Returns

Noble plc  vs.  DUKE UNIV HEALTH

Noble plc

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Noble plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting technical and fundamental indicators, Noble Plc may actually be approaching a critical reversion point that can send shares even higher in February 2025.

DUKE UNIV HEALTH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE UNIV HEALTH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26443CAA1 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Noble Plc and 26443CAA1

The main advantage of trading using opposite Noble Plc and 26443CAA1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Noble Plc position performs unexpectedly, 26443CAA1 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 26443CAA1 will offset losses from the drop in 26443CAA1's long position.

The idea behind Noble plc and DUKE UNIV HEALTH 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.