Correlation Between Forum Energy and Expro Group
Can any of the company-specific risk be diversified away by investing in both Forum Energy and Expro Group 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 Expro Group 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 Expro Group Holdings, you can compare the effects of market volatilities on Forum Energy and Expro Group 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 Expro Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Energy and Expro Group.
Diversification Opportunities for Forum Energy and Expro Group
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Forum and Expro is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Forum Energy Technologies and Expro Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expro Group Holdings 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 Expro Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expro Group Holdings has no effect on the direction of Forum Energy i.e., Forum Energy and Expro Group go up and down completely randomly.
Pair Corralation between Forum Energy and Expro Group
Considering the 90-day investment horizon Forum Energy Technologies is expected to generate 0.86 times more return on investment than Expro Group. However, Forum Energy Technologies is 1.17 times less risky than Expro Group. It trades about 0.05 of its potential returns per unit of risk. Expro Group Holdings is currently generating about -0.2 per unit of risk. If you would invest 1,791 in Forum Energy Technologies on November 28, 2024 and sell it today you would earn a total of 38.00 from holding Forum Energy Technologies or generate 2.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forum Energy Technologies vs. Expro Group Holdings
Performance |
| Timeline |
| Forum Energy Technologies |
| Expro Group Holdings |
Forum Energy and Expro Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Energy and Expro Group
The main advantage of trading using opposite Forum Energy and Expro Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum Energy position performs unexpectedly, Expro Group 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 Expro Group will offset losses from the drop in Expro Group's long position.| Forum Energy vs. Natural Gas Services | Forum Energy vs. Enerflex | Forum Energy vs. Now Inc | Forum Energy vs. Bristow Group |
| Expro Group vs. ChampionX | Expro Group vs. Ranger Energy Services | Expro Group vs. Cactus Inc | Expro Group vs. MRC Global |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |