Correlation Between ChampionX and Smart Sand
Can any of the company-specific risk be diversified away by investing in both ChampionX and Smart Sand 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 Smart Sand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Smart Sand, you can compare the effects of market volatilities on ChampionX and Smart Sand 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 Smart Sand. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Smart Sand.
Diversification Opportunities for ChampionX and Smart Sand
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ChampionX and Smart is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Smart Sand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart Sand 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 Smart Sand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart Sand has no effect on the direction of ChampionX i.e., ChampionX and Smart Sand go up and down completely randomly.
Pair Corralation between ChampionX and Smart Sand
Considering the 90-day investment horizon ChampionX is expected to generate 1.82 times less return on investment than Smart Sand. But when comparing it to its historical volatility, ChampionX is 2.24 times less risky than Smart Sand. It trades about 0.17 of its potential returns per unit of risk. Smart Sand is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 212.00 in Smart Sand on September 4, 2024 and sell it today you would earn a total of 28.00 from holding Smart Sand or generate 13.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. Smart Sand
Performance |
| Timeline |
| ChampionX |
| Smart Sand |
ChampionX and Smart Sand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Smart Sand
The main advantage of trading using opposite ChampionX and Smart Sand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX position performs unexpectedly, Smart Sand 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 Smart Sand will offset losses from the drop in Smart Sand's long position.| ChampionX vs. Geospace Technologies | ChampionX vs. Weatherford International PLC | ChampionX vs. Enerflex | ChampionX vs. RPC Inc |
| Smart Sand vs. Liberty Oilfield Services | Smart Sand vs. RPC Inc | Smart Sand vs. MRC Global | Smart Sand vs. Ranger Energy Services |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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