Correlation Between MRC Global and ProFrac Holding
Can any of the company-specific risk be diversified away by investing in both MRC Global and ProFrac 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 MRC Global and ProFrac Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MRC Global and ProFrac Holding Corp, you can compare the effects of market volatilities on MRC Global and ProFrac 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 MRC Global with a short position of ProFrac Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of MRC Global and ProFrac Holding.
Diversification Opportunities for MRC Global and ProFrac Holding
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MRC and ProFrac is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding MRC Global and ProFrac Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProFrac Holding Corp and MRC Global 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 MRC Global are associated (or correlated) with ProFrac Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProFrac Holding Corp has no effect on the direction of MRC Global i.e., MRC Global and ProFrac Holding go up and down completely randomly.
Pair Corralation between MRC Global and ProFrac Holding
Considering the 90-day investment horizon MRC Global is expected to generate 2.17 times less return on investment than ProFrac Holding. But when comparing it to its historical volatility, MRC Global is 1.27 times less risky than ProFrac Holding. It trades about 0.19 of its potential returns per unit of risk. ProFrac Holding Corp is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 591.00 in ProFrac Holding Corp on August 28, 2024 and sell it today you would earn a total of 196.00 from holding ProFrac Holding Corp or generate 33.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
MRC Global vs. ProFrac Holding Corp
Performance |
| Timeline |
| MRC Global |
| ProFrac Holding Corp |
MRC Global and ProFrac Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MRC Global and ProFrac Holding
The main advantage of trading using opposite MRC Global and ProFrac Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MRC Global position performs unexpectedly, ProFrac 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 ProFrac Holding will offset losses from the drop in ProFrac Holding's long position.| MRC Global vs. NOV Inc | MRC Global vs. Ranger Energy Services | MRC Global vs. Oil States International | MRC Global vs. Geospace Technologies |
| ProFrac Holding vs. ProPetro Holding Corp | ProFrac Holding vs. RPC Inc | ProFrac Holding vs. MRC Global | ProFrac Holding vs. Expro Group Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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