Correlation Between Forum Energy and Mammoth Energy
Can any of the company-specific risk be diversified away by investing in both Forum Energy and Mammoth 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 Forum Energy and Mammoth Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forum Energy Technologies and Mammoth Energy Services, you can compare the effects of market volatilities on Forum Energy and Mammoth 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 Forum Energy with a short position of Mammoth Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Energy and Mammoth Energy.
Diversification Opportunities for Forum Energy and Mammoth Energy
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Forum and Mammoth is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Forum Energy Technologies and Mammoth Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mammoth Energy Services and Forum Energy 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 Forum Energy Technologies are associated (or correlated) with Mammoth Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mammoth Energy Services has no effect on the direction of Forum Energy i.e., Forum Energy and Mammoth Energy go up and down completely randomly.
Pair Corralation between Forum Energy and Mammoth Energy
Considering the 90-day investment horizon Forum Energy Technologies is expected to generate 0.5 times more return on investment than Mammoth Energy. However, Forum Energy Technologies is 1.99 times less risky than Mammoth Energy. It trades about 0.11 of its potential returns per unit of risk. Mammoth Energy Services is currently generating about -0.14 per unit of risk. If you would invest 1,432 in Forum Energy Technologies on August 28, 2024 and sell it today you would earn a total of 85.00 from holding Forum Energy Technologies or generate 5.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forum Energy Technologies vs. Mammoth Energy Services
Performance |
| Timeline |
| Forum Energy Technologies |
| Mammoth Energy Services |
Forum Energy and Mammoth Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Energy and Mammoth Energy
The main advantage of trading using opposite Forum Energy and Mammoth Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Energy position performs unexpectedly, Mammoth 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 Mammoth Energy will offset losses from the drop in Mammoth Energy's long position.| Forum Energy vs. ProPetro Holding Corp | Forum Energy vs. RPC Inc | Forum Energy vs. MRC Global | Forum Energy vs. Expro Group Holdings |
| Mammoth Energy vs. Matthews International | Mammoth Energy vs. Griffon | Mammoth Energy vs. Steel Partners Holdings | Mammoth Energy vs. Compass Diversified 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 CEOs Directory module to screen CEOs from public companies around the world.
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