Correlation Between ProFrac Holding and Enservco
Can any of the company-specific risk be diversified away by investing in both ProFrac Holding and Enservco 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 Enservco 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 Enservco Co, you can compare the effects of market volatilities on ProFrac Holding and Enservco 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 Enservco. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProFrac Holding and Enservco.
Diversification Opportunities for ProFrac Holding and Enservco
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ProFrac and Enservco is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ProFrac Holding Corp and Enservco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enservco 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 Enservco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enservco has no effect on the direction of ProFrac Holding i.e., ProFrac Holding and Enservco go up and down completely randomly.
Pair Corralation between ProFrac Holding and Enservco
Given the investment horizon of 90 days ProFrac Holding Corp is expected to generate 0.59 times more return on investment than Enservco. However, ProFrac Holding Corp is 1.68 times less risky than Enservco. It trades about -0.03 of its potential returns per unit of risk. Enservco Co is currently generating about -0.07 per unit of risk. If you would invest 2,171 in ProFrac Holding Corp on August 28, 2024 and sell it today you would lose (1,384) from holding ProFrac Holding Corp or give up 63.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.58% |
| Values | Daily Returns |
ProFrac Holding Corp vs. Enservco Co
Performance |
| Timeline |
| ProFrac Holding Corp |
| Enservco |
ProFrac Holding and Enservco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProFrac Holding and Enservco
The main advantage of trading using opposite ProFrac Holding and Enservco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProFrac Holding position performs unexpectedly, Enservco 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 Enservco will offset losses from the drop in Enservco's long position.| ProFrac Holding vs. Newpark Resources | ProFrac Holding vs. Natural Gas Services | ProFrac Holding vs. Geospace Technologies | ProFrac Holding vs. MRC Global |
| Enservco vs. Houston American Energy | Enservco vs. Indonesia Energy | Enservco vs. Imperial Petroleum | Enservco vs. Nine Energy Service |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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