Correlation Between Key Energy and ProPetro Holding
Can any of the company-specific risk be diversified away by investing in both Key Energy 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 Key Energy and ProPetro Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Key Energy Services and ProPetro Holding Corp, you can compare the effects of market volatilities on Key Energy 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 Key Energy with a short position of ProPetro Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Key Energy and ProPetro Holding.
Diversification Opportunities for Key Energy and ProPetro Holding
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Key and ProPetro is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Key Energy Services 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 Key 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 Key Energy Services 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 Key Energy i.e., Key Energy and ProPetro Holding go up and down completely randomly.
Pair Corralation between Key Energy and ProPetro Holding
If you would invest 721.00 in ProPetro Holding Corp on August 31, 2024 and sell it today you would earn a total of 127.00 from holding ProPetro Holding Corp or generate 17.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Key Energy Services vs. ProPetro Holding Corp
Performance |
| Timeline |
| Key Energy Services |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProPetro Holding Corp |
Key Energy and ProPetro Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Key Energy and ProPetro Holding
The main advantage of trading using opposite Key Energy and ProPetro Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Key Energy 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.| Key Energy vs. Archrock | Key Energy vs. Newpark Resources | Key Energy vs. Bristow Group | Key Energy vs. TechnipFMC PLC |
| ProPetro Holding vs. Ranger Energy Services | ProPetro Holding vs. Newpark Resources | ProPetro Holding vs. RPC Inc | ProPetro Holding vs. Archrock |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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