Correlation Between Flotek Industries and ProPetro Holding
Can any of the company-specific risk be diversified away by investing in both Flotek Industries and ProPetro Holding 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 ProPetro Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flotek Industries and ProPetro Holding Corp, you can compare the effects of market volatilities on Flotek Industries and ProPetro Holding 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 ProPetro Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flotek Industries and ProPetro Holding.
Diversification Opportunities for Flotek Industries and ProPetro Holding
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flotek and ProPetro is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Flotek Industries and ProPetro Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProPetro Holding Corp 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 ProPetro Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProPetro Holding Corp has no effect on the direction of Flotek Industries i.e., Flotek Industries and ProPetro Holding go up and down completely randomly.
Pair Corralation between Flotek Industries and ProPetro Holding
Considering the 90-day investment horizon Flotek Industries is expected to under-perform the ProPetro Holding. But the stock apears to be less risky and, when comparing its historical volatility, Flotek Industries is 1.13 times less risky than ProPetro Holding. The stock trades about -0.15 of its potential returns per unit of risk. The ProPetro Holding Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 933.00 in ProPetro Holding Corp on November 1, 2024 and sell it today you would lose (13.00) from holding ProPetro Holding Corp or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flotek Industries vs. ProPetro Holding Corp
Performance |
| Timeline |
| Flotek Industries |
| ProPetro Holding Corp |
Flotek Industries and ProPetro Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flotek Industries and ProPetro Holding
The main advantage of trading using opposite Flotek Industries and ProPetro Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flotek Industries position performs unexpectedly, ProPetro Holding 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 ProPetro Holding will offset losses from the drop in ProPetro Holding'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 |
| ProPetro Holding vs. Ranger Energy Services | ProPetro Holding vs. RPC Inc | ProPetro Holding vs. Archrock | ProPetro Holding vs. Bristow Group |
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.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |