Correlation Between Kodiak Gas and Liberty Oilfield
Can any of the company-specific risk be diversified away by investing in both Kodiak Gas and Liberty Oilfield 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 Kodiak Gas and Liberty Oilfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kodiak Gas Services, and Liberty Oilfield Services, you can compare the effects of market volatilities on Kodiak Gas and Liberty Oilfield 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 Kodiak Gas with a short position of Liberty Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kodiak Gas and Liberty Oilfield.
Diversification Opportunities for Kodiak Gas and Liberty Oilfield
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kodiak and Liberty is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kodiak Gas Services, and Liberty Oilfield Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Oilfield Services and Kodiak Gas 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 Kodiak Gas Services, are associated (or correlated) with Liberty Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Oilfield Services has no effect on the direction of Kodiak Gas i.e., Kodiak Gas and Liberty Oilfield go up and down completely randomly.
Pair Corralation between Kodiak Gas and Liberty Oilfield
Considering the 90-day investment horizon Kodiak Gas Services, is expected to generate 20.58 times more return on investment than Liberty Oilfield. However, Kodiak Gas is 20.58 times more volatile than Liberty Oilfield Services. It trades about 0.06 of its potential returns per unit of risk. Liberty Oilfield Services is currently generating about 0.03 per unit of risk. If you would invest 0.00 in Kodiak Gas Services, on August 27, 2024 and sell it today you would earn a total of 4,044 from holding Kodiak Gas Services, or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 78.46% |
| Values | Daily Returns |
Kodiak Gas Services, vs. Liberty Oilfield Services
Performance |
| Timeline |
| Kodiak Gas Services, |
| Liberty Oilfield Services |
Kodiak Gas and Liberty Oilfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kodiak Gas and Liberty Oilfield
The main advantage of trading using opposite Kodiak Gas and Liberty Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kodiak Gas position performs unexpectedly, Liberty Oilfield 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 Liberty Oilfield will offset losses from the drop in Liberty Oilfield's long position.| Kodiak Gas vs. ProPetro Holding Corp | Kodiak Gas vs. RPC Inc | Kodiak Gas vs. MRC Global | Kodiak Gas vs. Expro Group Holdings |
| Liberty Oilfield vs. Ranger Energy Services | Liberty Oilfield vs. ProFrac Holding Corp | Liberty Oilfield vs. Archrock | Liberty Oilfield vs. Newpark Resources |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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