Correlation Between Bristow and NCS Multistage

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

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

Diversification Opportunities for Bristow and NCS Multistage

-0.14

Correlation Coefficient

Bristow  NCS Multistage

Good diversification

The 3 months correlation between Bristow and NCS is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bristow Group and NCS Multistage Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCS Multistage Holdings and Bristow 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 Bristow Group are associated (or correlated) with NCS Multistage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCS Multistage Holdings has no effect on the direction of Bristow i.e., Bristow and NCS Multistage go up and down completely randomly.

Pair Corralation between Bristow and NCS Multistage

Given the investment horizon of 90 days Bristow Group is expected to under-perform the NCS Multistage. But the stock apears to be less risky and, when comparing its historical volatility, Bristow Group is 2.07 times less risky than NCS Multistage. The stock trades about 0.0 of its potential returns per unit of risk. The NCS Multistage Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2,472  in NCS Multistage Holdings on December 27, 2024 and sell it today you would earn a total of  1,195  from holding NCS Multistage Holdings or generate 48.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Bristow Group  vs.  NCS Multistage Holdings

Bristow Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bristow Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Bristow is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

NCS Multistage Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NCS Multistage Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, NCS Multistage displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bristow and NCS Multistage

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

The idea behind Bristow Group and NCS Multistage 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.

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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.