Correlation Between Liberty Oilfield and Enservco
Can any of the company-specific risk be diversified away by investing in both Liberty Oilfield and Enservco 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 Enservco 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 Enservco Co, you can compare the effects of market volatilities on Liberty Oilfield and Enservco 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 Enservco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Oilfield and Enservco.
Diversification Opportunities for Liberty Oilfield and Enservco
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Liberty and Enservco is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Oilfield Services and Enservco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enservco 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 Enservco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enservco has no effect on the direction of Liberty Oilfield i.e., Liberty Oilfield and Enservco go up and down completely randomly.
Pair Corralation between Liberty Oilfield and Enservco
Given the investment horizon of 90 days Liberty Oilfield Services is expected to generate 0.38 times more return on investment than Enservco. However, Liberty Oilfield Services is 2.62 times less risky than Enservco. It trades about 0.03 of its potential returns per unit of risk. Enservco Co is currently generating about -0.07 per unit of risk. If you would invest 1,442 in Liberty Oilfield Services on August 28, 2024 and sell it today you would earn a total of 430.00 from holding Liberty Oilfield Services or generate 29.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
Liberty Oilfield Services vs. Enservco Co
Performance |
| Timeline |
| Liberty Oilfield Services |
| Enservco |
Liberty Oilfield and Enservco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Oilfield and Enservco
The main advantage of trading using opposite Liberty Oilfield and Enservco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Oilfield position performs unexpectedly, Enservco 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 Enservco will offset losses from the drop in Enservco's long position.| Liberty Oilfield vs. Ranger Energy Services | Liberty Oilfield vs. ProFrac Holding Corp | Liberty Oilfield vs. Archrock | Liberty Oilfield vs. Newpark Resources |
| Enservco vs. Houston American Energy | Enservco vs. Indonesia Energy | Enservco vs. Imperial Petroleum | Enservco vs. Nine Energy Service |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |