Correlation Between Expro Group and NOV

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

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

Diversification Opportunities for Expro Group and NOV

0.46

Correlation Coefficient

Expro Group  NOV

Very weak diversification

The 3 months correlation between Expro and NOV is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Expro Group Holdings and NOV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NOV Inc and Expro Group 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 Expro Group Holdings are associated (or correlated) with NOV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NOV Inc has no effect on the direction of Expro Group i.e., Expro Group and NOV go up and down completely randomly.

Pair Corralation between Expro Group and NOV

Given the investment horizon of 90 days Expro Group Holdings is expected to under-perform the NOV. In addition to that, Expro Group is 1.62 times more volatile than NOV Inc. It trades about -0.16 of its total potential returns per unit of risk. NOV Inc is currently generating about -0.08 per unit of volatility. If you would invest  1,769  in NOV Inc on August 30, 2024 and sell it today you would lose (170.00) from holding NOV Inc or give up 9.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Expro Group Holdings  vs.  NOV Inc

Expro Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expro Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

NOV Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NOV Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Expro Group and NOV

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

The idea behind Expro Group Holdings and NOV 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.