Correlation Between ChampionX and Oil States
Can any of the company-specific risk be diversified away by investing in both ChampionX and Oil States 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 Oil States into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Oil States International, you can compare the effects of market volatilities on ChampionX and Oil States 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 Oil States. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Oil States.
Diversification Opportunities for ChampionX and Oil States
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ChampionX and Oil is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Oil States International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil States International 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 Oil States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil States International has no effect on the direction of ChampionX i.e., ChampionX and Oil States go up and down completely randomly.
Pair Corralation between ChampionX and Oil States
Considering the 90-day investment horizon ChampionX is expected to under-perform the Oil States. But the stock apears to be less risky and, when comparing its historical volatility, ChampionX is 1.08 times less risky than Oil States. The stock trades about -0.14 of its potential returns per unit of risk. The Oil States International is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 574.00 in Oil States International on November 18, 2024 and sell it today you would lose (32.00) from holding Oil States International or give up 5.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. Oil States International
Performance |
| Timeline |
| ChampionX |
| Oil States International |
ChampionX and Oil States Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Oil States
The main advantage of trading using opposite ChampionX and Oil States positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX position performs unexpectedly, Oil States 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 Oil States will offset losses from the drop in Oil States' long position.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
| Oil States vs. Oceaneering International | Oil States vs. ChampionX | Oil States vs. TechnipFMC PLC | Oil States vs. Helix Energy Solutions |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |