Correlation Between ChampionX and Weatherford International
Can any of the company-specific risk be diversified away by investing in both ChampionX and Weatherford International 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 Weatherford International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ChampionX and Weatherford International PLC, you can compare the effects of market volatilities on ChampionX and Weatherford International 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 Weatherford International. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChampionX and Weatherford International.
Diversification Opportunities for ChampionX and Weatherford International
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ChampionX and Weatherford is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Weatherford International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weatherford 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 Weatherford International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weatherford International has no effect on the direction of ChampionX i.e., ChampionX and Weatherford International go up and down completely randomly.
Pair Corralation between ChampionX and Weatherford International
Considering the 90-day investment horizon ChampionX is expected to generate 1.07 times less return on investment than Weatherford International. But when comparing it to its historical volatility, ChampionX is 1.34 times less risky than Weatherford International. It trades about 0.11 of its potential returns per unit of risk. Weatherford International PLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 8,091 in Weatherford International PLC on August 24, 2024 and sell it today you would earn a total of 441.00 from holding Weatherford International PLC or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ChampionX vs. Weatherford International PLC
Performance |
| Timeline |
| ChampionX |
| Weatherford International |
ChampionX and Weatherford International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ChampionX and Weatherford International
The main advantage of trading using opposite ChampionX and Weatherford International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChampionX position performs unexpectedly, Weatherford International 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 Weatherford International will offset losses from the drop in Weatherford International's long position.| ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
| Weatherford International vs. Bristow Group | Weatherford International vs. RPC Inc | Weatherford International vs. NOV Inc | Weatherford International vs. Oceaneering International |
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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