Correlation Between ChampionX and National Energy
Can any of the company-specific risk be diversified away by investing in both ChampionX and National 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 National Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and National Energy Services, you can compare the effects of market volatilities on ChampionX and National 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 National Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and National Energy.
Diversification Opportunities for ChampionX and National Energy
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ChampionX and National is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and National Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Energy Services 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 National Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Energy Services has no effect on the direction of ChampionX i.e., ChampionX and National Energy go up and down completely randomly.
Pair Corralation between ChampionX and National Energy
Considering the 90-day investment horizon ChampionX is expected to generate 1.01 times more return on investment than National Energy. However, ChampionX is 1.01 times more volatile than National Energy Services. It trades about 0.18 of its potential returns per unit of risk. National Energy Services is currently generating about -0.11 per unit of risk. If you would invest 2,824 in ChampionX on August 31, 2024 and sell it today you would earn a total of 246.00 from holding ChampionX or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. National Energy Services
Performance |
| Timeline |
| ChampionX |
| National Energy Services |
ChampionX and National Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and National Energy
The main advantage of trading using opposite ChampionX and National Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX position performs unexpectedly, National 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 National Energy will offset losses from the drop in National Energy's long position.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
| National Energy vs. Dawson Geophysical | National Energy vs. Mccoy Global | National Energy vs. Ranger Energy Services | National Energy 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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