Correlation Between Wienerberger and Newpark Resources

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

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

Diversification Opportunities for Wienerberger and Newpark Resources

0.01

Correlation Coefficient

Wienerberger  Newpark Resources

Significant diversification

The 3 months correlation between Wienerberger and Newpark is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Wienerberger AG and Newpark Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newpark Resources and Wienerberger 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 Wienerberger AG are associated (or correlated) with Newpark Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newpark Resources has no effect on the direction of Wienerberger i.e., Wienerberger and Newpark Resources go up and down completely randomly.

Pair Corralation between Wienerberger and Newpark Resources

If you would invest  3,248  in Wienerberger AG on September 27, 2024 and sell it today you would earn a total of  0.00  from holding Wienerberger AG or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	80.95%
Values	Daily Returns

Wienerberger AG  vs.  Newpark Resources

Wienerberger AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wienerberger AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Wienerberger is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Newpark Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Newpark Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Newpark Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Wienerberger and Newpark Resources

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

The idea behind Wienerberger AG and Newpark Resources 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.