Correlation Between Noble Plc and Chester Mining

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

By analyzing existing cross correlation between Noble plc and Chester Mining, you can compare the effects of market volatilities on Noble Plc and Chester Mining 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 Noble Plc with a short position of Chester Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Noble Plc and Chester Mining.

Diversification Opportunities for Noble Plc and Chester Mining

0.0

Correlation Coefficient

Noble Plc  Chester Mining

Pay attention - limited upside

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

Pair Corralation between Noble Plc and Chester Mining

If you would invest  0.02  in Chester Mining on September 30, 2024 and sell it today you would earn a total of  0.00  from holding Chester Mining or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Noble plc  vs.  Chester Mining

Noble plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Noble plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Chester Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chester Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Chester Mining is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Noble Plc and Chester Mining

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

The idea behind Noble plc and Chester Mining 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.