Correlation Between Indonesia Energy and Nine Energy
Can any of the company-specific risk be diversified away by investing in both Indonesia Energy and Nine 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 Indonesia Energy and Nine Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Indonesia Energy and Nine Energy Service, you can compare the effects of market volatilities on Indonesia Energy and Nine 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 Indonesia Energy with a short position of Nine Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indonesia Energy and Nine Energy.
Diversification Opportunities for Indonesia Energy and Nine Energy
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Indonesia and Nine is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Indonesia Energy and Nine Energy Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nine Energy Service and Indonesia 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 Indonesia Energy are associated (or correlated) with Nine Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nine Energy Service has no effect on the direction of Indonesia Energy i.e., Indonesia Energy and Nine Energy go up and down completely randomly.
Pair Corralation between Indonesia Energy and Nine Energy
Given the investment horizon of 90 days Indonesia Energy is expected to generate 1.39 times more return on investment than Nine Energy. However, Indonesia Energy is 1.39 times more volatile than Nine Energy Service. It trades about 0.01 of its potential returns per unit of risk. Nine Energy Service is currently generating about -0.05 per unit of risk. If you would invest 630.00 in Indonesia Energy on November 4, 2024 and sell it today you would lose (362.00) from holding Indonesia Energy or give up 57.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Indonesia Energy vs. Nine Energy Service
Performance |
| Timeline |
| Indonesia Energy |
| Nine Energy Service |
Indonesia Energy and Nine Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indonesia Energy and Nine Energy
The main advantage of trading using opposite Indonesia Energy and Nine Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indonesia Energy position performs unexpectedly, Nine 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 Nine Energy will offset losses from the drop in Nine Energy's long position.| Indonesia Energy vs. Houston American Energy | Indonesia Energy vs. Barnwell Industries | Indonesia Energy vs. Mexco Energy | Indonesia Energy vs. PHX Minerals |
| Nine Energy vs. Liberty Oilfield Services | Nine Energy vs. ProFrac Holding Corp | Nine Energy vs. Helix Energy Solutions | Nine Energy vs. Enerflex |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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