Correlation Between ChampionX and Bristow
Can any of the company-specific risk be diversified away by investing in both ChampionX and Bristow 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 Bristow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Bristow Group, you can compare the effects of market volatilities on ChampionX and Bristow 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 Bristow. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Bristow.
Diversification Opportunities for ChampionX and Bristow
Very weak diversification
The 3 months correlation between ChampionX and Bristow is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Bristow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristow Group 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 Bristow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristow Group has no effect on the direction of ChampionX i.e., ChampionX and Bristow go up and down completely randomly.
Pair Corralation between ChampionX and Bristow
Considering the 90-day investment horizon ChampionX is expected to generate 3.79 times less return on investment than Bristow. But when comparing it to its historical volatility, ChampionX is 1.18 times less risky than Bristow. It trades about 0.02 of its potential returns per unit of risk. Bristow Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,575 in Bristow Group on August 26, 2024 and sell it today you would earn a total of 1,254 from holding Bristow Group or generate 48.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. Bristow Group
Performance |
| Timeline |
| ChampionX |
| Bristow Group |
ChampionX and Bristow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Bristow
The main advantage of trading using opposite ChampionX and Bristow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX position performs unexpectedly, Bristow 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 Bristow will offset losses from the drop in Bristow's long position.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
| Bristow vs. ProPetro Holding Corp | Bristow vs. RPC Inc | Bristow vs. MRC Global | Bristow vs. Expro Group Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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