Correlation Between ProFrac Holding and Calfrac Well
Can any of the company-specific risk be diversified away by investing in both ProFrac Holding and Calfrac Well 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 ProFrac Holding and Calfrac Well into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProFrac Holding Corp and Calfrac Well Services, you can compare the effects of market volatilities on ProFrac Holding and Calfrac Well 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 ProFrac Holding with a short position of Calfrac Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProFrac Holding and Calfrac Well.
Diversification Opportunities for ProFrac Holding and Calfrac Well
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProFrac and Calfrac is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding ProFrac Holding Corp and Calfrac Well Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calfrac Well Services and ProFrac Holding 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 ProFrac Holding Corp are associated (or correlated) with Calfrac Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calfrac Well Services has no effect on the direction of ProFrac Holding i.e., ProFrac Holding and Calfrac Well go up and down completely randomly.
Pair Corralation between ProFrac Holding and Calfrac Well
Given the investment horizon of 90 days ProFrac Holding Corp is expected to generate 1.08 times more return on investment than Calfrac Well. However, ProFrac Holding is 1.08 times more volatile than Calfrac Well Services. It trades about 0.32 of its potential returns per unit of risk. Calfrac Well Services is currently generating about 0.03 per unit of risk. If you would invest 714.00 in ProFrac Holding Corp on October 20, 2024 and sell it today you would earn a total of 177.00 from holding ProFrac Holding Corp or generate 24.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProFrac Holding Corp vs. Calfrac Well Services
Performance |
| Timeline |
| ProFrac Holding Corp |
| Calfrac Well Services |
ProFrac Holding and Calfrac Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProFrac Holding and Calfrac Well
The main advantage of trading using opposite ProFrac Holding and Calfrac Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProFrac Holding position performs unexpectedly, Calfrac Well 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 Calfrac Well will offset losses from the drop in Calfrac Well's long position.| ProFrac Holding vs. Natural Gas Services | ProFrac Holding vs. Geospace Technologies | ProFrac Holding vs. MRC Global | ProFrac Holding vs. Liberty Oilfield Services |
| Calfrac Well vs. Greenway Technologies | Calfrac Well vs. Akastor ASA | Calfrac Well vs. Auri Inc | Calfrac Well vs. Us Energy Initiative |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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