Correlation Between CWC Energy and ProFrac Holding
Can any of the company-specific risk be diversified away by investing in both CWC Energy and ProFrac Holding 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 CWC Energy and ProFrac Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CWC Energy Services and ProFrac Holding Corp, you can compare the effects of market volatilities on CWC Energy and ProFrac Holding 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 CWC Energy with a short position of ProFrac Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of CWC Energy and ProFrac Holding.
Diversification Opportunities for CWC Energy and ProFrac Holding
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CWC and ProFrac is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding CWC Energy Services and ProFrac Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProFrac Holding Corp and CWC Energy 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 CWC Energy Services are associated (or correlated) with ProFrac Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProFrac Holding Corp has no effect on the direction of CWC Energy i.e., CWC Energy and ProFrac Holding go up and down completely randomly.
Pair Corralation between CWC Energy and ProFrac Holding
If you would invest 613.00 in ProFrac Holding Corp on August 31, 2024 and sell it today you would earn a total of 300.00 from holding ProFrac Holding Corp or generate 48.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
CWC Energy Services vs. ProFrac Holding Corp
Performance |
| Timeline |
| CWC Energy Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProFrac Holding Corp |
CWC Energy and ProFrac Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CWC Energy and ProFrac Holding
The main advantage of trading using opposite CWC Energy and ProFrac Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CWC Energy position performs unexpectedly, ProFrac Holding 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 ProFrac Holding will offset losses from the drop in ProFrac Holding's long position.| CWC Energy vs. Petrofac Ltd ADR | CWC Energy vs. Saipem SpA | CWC Energy vs. SMG Industries | CWC Energy vs. Worley Parsons |
| ProFrac Holding vs. Newpark Resources | ProFrac Holding vs. Natural Gas Services | ProFrac Holding vs. Geospace Technologies | ProFrac Holding vs. MRC Global |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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