Correlation Between ProFrac Holding and Profire Ene
Can any of the company-specific risk be diversified away by investing in both ProFrac Holding and Profire Ene 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 Profire Ene 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 Profire Ene, you can compare the effects of market volatilities on ProFrac Holding and Profire Ene 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 Profire Ene. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProFrac Holding and Profire Ene.
Diversification Opportunities for ProFrac Holding and Profire Ene
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ProFrac and Profire is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding ProFrac Holding Corp and Profire Ene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profire Ene 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 Profire Ene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profire Ene has no effect on the direction of ProFrac Holding i.e., ProFrac Holding and Profire Ene go up and down completely randomly.
Pair Corralation between ProFrac Holding and Profire Ene
Given the investment horizon of 90 days ProFrac Holding is expected to generate 1.52 times less return on investment than Profire Ene. But when comparing it to its historical volatility, ProFrac Holding Corp is 2.23 times less risky than Profire Ene. It trades about 0.32 of its potential returns per unit of risk. Profire Ene is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 171.00 in Profire Ene on August 28, 2024 and sell it today you would earn a total of 81.00 from holding Profire Ene or generate 47.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProFrac Holding Corp vs. Profire Ene
Performance |
| Timeline |
| ProFrac Holding Corp |
| Profire Ene |
ProFrac Holding and Profire Ene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProFrac Holding and Profire Ene
The main advantage of trading using opposite ProFrac Holding and Profire Ene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProFrac Holding position performs unexpectedly, Profire Ene 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 Profire Ene will offset losses from the drop in Profire Ene's long position.| ProFrac Holding vs. Newpark Resources | ProFrac Holding vs. Natural Gas Services | ProFrac Holding vs. Geospace Technologies | ProFrac Holding vs. MRC Global |
| Profire Ene vs. Enservco Co | Profire Ene vs. Nine Energy Service | Profire Ene vs. Enerflex | Profire Ene vs. Geospace Technologies |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |