Correlation Between Newpark Resources and Adstar

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

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

Diversification Opportunities for Newpark Resources and Adstar

0.0

Correlation Coefficient

Newpark Resources  Adstar

Pay attention - limited upside

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

Pair Corralation between Newpark Resources and Adstar

If you would invest  0.01  in Adstar Inc on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Adstar Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	9.09%
Values	Daily Returns

Newpark Resources  vs.  Adstar Inc

Newpark Resources

Risk-Adjusted Performance

0 of 100

Weak

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

Adstar Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Newpark Resources and Adstar

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

The idea behind Newpark Resources and Adstar Inc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.