Correlation Between MRC Global and Now

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

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

Diversification Opportunities for MRC Global and Now

0.04

Correlation Coefficient

MRC Global  Now

Significant diversification

The 3 months correlation between MRC and Now is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding MRC Global and Now Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Now Inc and MRC 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 MRC Global are associated (or correlated) with Now. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Now Inc has no effect on the direction of MRC Global i.e., MRC Global and Now go up and down completely randomly.

Pair Corralation between MRC Global and Now

Considering the 90-day investment horizon MRC Global is expected to generate 1.2 times more return on investment than Now. However, MRC Global is 1.2 times more volatile than Now Inc. It trades about 0.09 of its potential returns per unit of risk. Now Inc is currently generating about -0.04 per unit of risk. If you would invest  1,210  in MRC Global on May 4, 2025 and sell it today you would earn a total of  177.00  from holding MRC Global or generate 14.63% return on investment over 90 days.

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

MRC Global  vs.  Now Inc

MRC Global

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MRC Global are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, MRC Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Now Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Now 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 MRC Global and Now

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

The idea behind MRC Global and Now 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.