Correlation Between Dmc Global and Core Laboratories

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

By analyzing existing cross correlation between Dmc Global and Core Laboratories NV, you can compare the effects of market volatilities on Dmc Global and Core Laboratories 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 Dmc Global with a short position of Core Laboratories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dmc Global and Core Laboratories.

Diversification Opportunities for Dmc Global and Core Laboratories

0.63

Correlation Coefficient

Dmc Global  Core Laboratories

Poor diversification

The 3 months correlation between Dmc and Core is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Dmc Global and Core Laboratories NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Laboratories and Dmc Global 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 Dmc Global are associated (or correlated) with Core Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Laboratories has no effect on the direction of Dmc Global i.e., Dmc Global and Core Laboratories go up and down completely randomly.

Pair Corralation between Dmc Global and Core Laboratories

Given the investment horizon of 90 days Dmc Global is expected to generate 1.24 times more return on investment than Core Laboratories. However, Dmc Global is 1.24 times more volatile than Core Laboratories NV. It trades about -0.04 of its potential returns per unit of risk. Core Laboratories NV is currently generating about -0.06 per unit of risk. If you would invest  693.00  in Dmc Global on May 11, 2025 and sell it today you would lose (108.00) from holding Dmc Global or give up 15.58% of portfolio value over 90 days.

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

Dmc Global  vs.  Core Laboratories NV

Dmc Global

Risk-Adjusted Performance

Weakest

Over the last 90 days Dmc Global 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 healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Core Laboratories

Risk-Adjusted Performance

Weakest

Over the last 90 days Core Laboratories NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Dmc Global and Core Laboratories

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

The idea behind Dmc Global and Core Laboratories NV 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.

Check out your portfolio center.

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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.