Correlation Between NewMarket and Bolt Projects

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

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

Diversification Opportunities for NewMarket and Bolt Projects

-0.37

Correlation Coefficient

NewMarket  Bolt Projects

Very good diversification

The 3 months correlation between NewMarket and Bolt is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding NewMarket and Bolt Projects Holdings, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolt Projects Holdings, and NewMarket 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 NewMarket are associated (or correlated) with Bolt Projects. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolt Projects Holdings, has no effect on the direction of NewMarket i.e., NewMarket and Bolt Projects go up and down completely randomly.

Pair Corralation between NewMarket and Bolt Projects

Considering the 90-day investment horizon NewMarket is expected to under-perform the Bolt Projects. But the stock apears to be less risky and, when comparing its historical volatility, NewMarket is 26.81 times less risky than Bolt Projects. The stock trades about -0.25 of its potential returns per unit of risk. The Bolt Projects Holdings, is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  3.99  in Bolt Projects Holdings, on October 6, 2024 and sell it today you would earn a total of  0.20  from holding Bolt Projects Holdings, or generate 5.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	60.0%
Values	Daily Returns

NewMarket  vs.  Bolt Projects Holdings,

NewMarket

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NewMarket has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, NewMarket is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Bolt Projects Holdings,

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Bolt Projects Holdings, are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile forward-looking signals, Bolt Projects showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NewMarket and Bolt Projects

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

The idea behind NewMarket and Bolt Projects Holdings, 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.