Correlation Between KLX Energy and DRQ Old
Can any of the company-specific risk be diversified away by investing in both KLX Energy and DRQ Old 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 KLX Energy and DRQ Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLX Energy Services and DRQ Old, you can compare the effects of market volatilities on KLX Energy and DRQ Old 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 KLX Energy with a short position of DRQ Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLX Energy and DRQ Old.
Diversification Opportunities for KLX Energy and DRQ Old
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between KLX and DRQ is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding KLX Energy Services and DRQ Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DRQ Old and KLX 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 KLX Energy Services are associated (or correlated) with DRQ Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DRQ Old has no effect on the direction of KLX Energy i.e., KLX Energy and DRQ Old go up and down completely randomly.
Pair Corralation between KLX Energy and DRQ Old
If you would invest 498.00 in KLX Energy Services on November 1, 2024 and sell it today you would earn a total of 47.00 from holding KLX Energy Services or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
KLX Energy Services vs. DRQ Old
Performance |
| Timeline |
| KLX Energy Services |
| DRQ Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KLX Energy and DRQ Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KLX Energy and DRQ Old
The main advantage of trading using opposite KLX Energy and DRQ Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLX Energy position performs unexpectedly, DRQ Old 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 DRQ Old will offset losses from the drop in DRQ Old's long position.| KLX Energy vs. RPC Inc | KLX Energy vs. ProPetro Holding Corp | KLX Energy vs. Ranger Energy Services | KLX Energy vs. Flotek Industries |
| DRQ Old vs. MRC Global | DRQ Old vs. NOV Inc | DRQ Old vs. Ranger Energy Services | DRQ Old vs. Helix Energy Solutions |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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