Correlation Between Liberty Oilfield and Atlas Energy
Can any of the company-specific risk be diversified away by investing in both Liberty Oilfield and Atlas 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 Liberty Oilfield and Atlas Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Oilfield Services and Atlas Energy Solutions, you can compare the effects of market volatilities on Liberty Oilfield and Atlas 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 Liberty Oilfield with a short position of Atlas Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Oilfield and Atlas Energy.
Diversification Opportunities for Liberty Oilfield and Atlas Energy
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Liberty and Atlas is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Oilfield Services and Atlas Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Energy Solutions and Liberty Oilfield 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 Liberty Oilfield Services are associated (or correlated) with Atlas Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Energy Solutions has no effect on the direction of Liberty Oilfield i.e., Liberty Oilfield and Atlas Energy go up and down completely randomly.
Pair Corralation between Liberty Oilfield and Atlas Energy
Given the investment horizon of 90 days Liberty Oilfield is expected to generate 29.1 times less return on investment than Atlas Energy. But when comparing it to its historical volatility, Liberty Oilfield Services is 18.28 times less risky than Atlas Energy. It trades about 0.03 of its potential returns per unit of risk. Atlas Energy Solutions is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.00 in Atlas Energy Solutions on September 2, 2024 and sell it today you would earn a total of 2,357 from holding Atlas Energy Solutions or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 88.31% |
| Values | Daily Returns |
Liberty Oilfield Services vs. Atlas Energy Solutions
Performance |
| Timeline |
| Liberty Oilfield Services |
| Atlas Energy Solutions |
Liberty Oilfield and Atlas Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Oilfield and Atlas Energy
The main advantage of trading using opposite Liberty Oilfield and Atlas Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Oilfield position performs unexpectedly, Atlas 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 Atlas Energy will offset losses from the drop in Atlas Energy's long position.| Liberty Oilfield vs. Ranger Energy Services | Liberty Oilfield vs. ProFrac Holding Corp | Liberty Oilfield vs. Archrock | Liberty Oilfield vs. Newpark Resources |
| Atlas Energy vs. ProPetro Holding Corp | Atlas Energy vs. Ranger Energy Services | Atlas Energy vs. Flotek Industries | Atlas Energy vs. Liberty Oilfield Services |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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