Correlation Between Bristow and Nextier Oilfield

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

By analyzing existing cross correlation between Bristow Group and Nextier Oilfield Solutions, you can compare the effects of market volatilities on Bristow and Nextier Oilfield 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 Nextier Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristow and Nextier Oilfield.

Diversification Opportunities for Bristow and Nextier Oilfield

-0.44

Correlation Coefficient

Bristow  Nextier Oilfield

Very good diversification

The 3 months correlation between Bristow and Nextier is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bristow Group and Nextier Oilfield Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextier Oilfield Sol 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 Nextier Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextier Oilfield Sol has no effect on the direction of Bristow i.e., Bristow and Nextier Oilfield go up and down completely randomly.

Pair Corralation between Bristow and Nextier Oilfield

If you would invest  3,423  in Bristow Group on August 13, 2024 and sell it today you would earn a total of  363.00  from holding Bristow Group or generate 10.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Bristow Group  vs.  Nextier Oilfield Solutions

Bristow Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bristow Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Bristow is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Nextier Oilfield Sol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nextier Oilfield Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Nextier Oilfield is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Bristow and Nextier Oilfield

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

The idea behind Bristow Group and Nextier Oilfield Solutions 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.