Correlation Between ChampionX and Ranger Energy
Can any of the company-specific risk be diversified away by investing in both ChampionX and Ranger 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 Ranger Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Ranger Energy Services, you can compare the effects of market volatilities on ChampionX and Ranger 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 Ranger Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Ranger Energy.
Diversification Opportunities for ChampionX and Ranger Energy
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between ChampionX and Ranger is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Ranger Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ranger 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 Ranger Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ranger Energy Services has no effect on the direction of ChampionX i.e., ChampionX and Ranger Energy go up and down completely randomly.
Pair Corralation between ChampionX and Ranger Energy
Considering the 90-day investment horizon ChampionX is expected to under-perform the Ranger Energy. But the stock apears to be less risky and, when comparing its historical volatility, ChampionX is 1.26 times less risky than Ranger Energy. The stock trades about -0.01 of its potential returns per unit of risk. The Ranger Energy Services is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,049 in Ranger Energy Services on August 24, 2024 and sell it today you would earn a total of 621.00 from holding Ranger Energy Services or generate 59.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. Ranger Energy Services
Performance |
| Timeline |
| ChampionX |
| Ranger Energy Services |
ChampionX and Ranger Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Ranger Energy
The main advantage of trading using opposite ChampionX and Ranger Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX position performs unexpectedly, Ranger 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 Ranger Energy will offset losses from the drop in Ranger Energy's long position.| ChampionX vs. Bristow Group | ChampionX vs. RPC Inc | ChampionX vs. NOV Inc | ChampionX vs. Oceaneering International |
| Ranger Energy vs. Newpark Resources | Ranger Energy vs. Archrock | Ranger Energy vs. Bristow Group | Ranger Energy vs. Flotek Industries |
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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