Correlation Between Bristow and MRC Global

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

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

Diversification Opportunities for Bristow and MRC Global

0.79

Correlation Coefficient

Bristow  MRC Global

Poor diversification

The 3 months correlation between Bristow and MRC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bristow Group and MRC Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRC Global 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 MRC Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRC Global has no effect on the direction of Bristow i.e., Bristow and MRC Global go up and down completely randomly.

Pair Corralation between Bristow and MRC Global

Given the investment horizon of 90 days Bristow is expected to generate 1.37 times less return on investment than MRC Global. But when comparing it to its historical volatility, Bristow Group is 1.04 times less risky than MRC Global. It trades about 0.03 of its potential returns per unit of risk. MRC Global is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  925.00  in MRC Global on February 11, 2025 and sell it today you would earn a total of  378.00  from holding MRC Global or generate 40.86% return on investment over 90 days.

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

Bristow Group  vs.  MRC Global

Bristow Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bristow Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in June 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

MRC Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days MRC Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, MRC Global is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Bristow and MRC Global

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

The idea behind Bristow Group and MRC Global 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.