Correlation Between ChampionX and Forum Energy
Can any of the company-specific risk be diversified away by investing in both ChampionX and Forum Energy 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 ChampionX and Forum Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Forum Energy Technologies, you can compare the effects of market volatilities on ChampionX and Forum Energy 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 ChampionX with a short position of Forum Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Forum Energy.
Diversification Opportunities for ChampionX and Forum Energy
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ChampionX and Forum is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Forum Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forum Energy Technologies and ChampionX 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 ChampionX are associated (or correlated) with Forum Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forum Energy Technologies has no effect on the direction of ChampionX i.e., ChampionX and Forum Energy go up and down completely randomly.
Pair Corralation between ChampionX and Forum Energy
Considering the 90-day investment horizon ChampionX is expected to generate 0.79 times more return on investment than Forum Energy. However, ChampionX is 1.26 times less risky than Forum Energy. It trades about 0.02 of its potential returns per unit of risk. Forum Energy Technologies is currently generating about -0.03 per unit of risk. If you would invest 2,873 in ChampionX on August 27, 2024 and sell it today you would earn a total of 251.00 from holding ChampionX or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. Forum Energy Technologies
Performance |
| Timeline |
| ChampionX |
| Forum Energy Technologies |
ChampionX and Forum Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Forum Energy
The main advantage of trading using opposite ChampionX and Forum Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX position performs unexpectedly, Forum Energy 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 Forum Energy will offset losses from the drop in Forum Energy's long position.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
| Forum Energy vs. Natural Gas Services | Forum Energy vs. Enerflex | Forum Energy vs. Now Inc | Forum Energy vs. Newpark Resources |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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