Correlation Between Flotek Industries and Enservco
Can any of the company-specific risk be diversified away by investing in both Flotek Industries and Enservco 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 Flotek Industries and Enservco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flotek Industries and Enservco Co, you can compare the effects of market volatilities on Flotek Industries and Enservco 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 Flotek Industries with a short position of Enservco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flotek Industries and Enservco.
Diversification Opportunities for Flotek Industries and Enservco
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flotek and Enservco is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Flotek Industries and Enservco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enservco and Flotek Industries 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 Flotek Industries are associated (or correlated) with Enservco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enservco has no effect on the direction of Flotek Industries i.e., Flotek Industries and Enservco go up and down completely randomly.
Pair Corralation between Flotek Industries and Enservco
Considering the 90-day investment horizon Flotek Industries is expected to generate 0.53 times more return on investment than Enservco. However, Flotek Industries is 1.89 times less risky than Enservco. It trades about 0.15 of its potential returns per unit of risk. Enservco Co is currently generating about -0.14 per unit of risk. If you would invest 426.00 in Flotek Industries on August 31, 2024 and sell it today you would earn a total of 424.00 from holding Flotek Industries or generate 99.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.4% |
| Values | Daily Returns |
Flotek Industries vs. Enservco Co
Performance |
| Timeline |
| Flotek Industries |
| Enservco |
Flotek Industries and Enservco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flotek Industries and Enservco
The main advantage of trading using opposite Flotek Industries and Enservco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flotek Industries position performs unexpectedly, Enservco 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 Enservco will offset losses from the drop in Enservco's long position.| Flotek Industries vs. ProPetro Holding Corp | Flotek Industries vs. Liberty Oilfield Services | Flotek Industries vs. KLX Energy Services | Flotek Industries vs. MRC Global |
| Enservco vs. Houston American Energy | Enservco vs. Indonesia Energy | Enservco vs. Imperial Petroleum | Enservco vs. Nine Energy Service |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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