Correlation Between Nextier Oilfield and Flotek Industries
Can any of the company-specific risk be diversified away by investing in both Nextier Oilfield and Flotek Industries 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 Nextier Oilfield and Flotek Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nextier Oilfield Solutions and Flotek Industries, you can compare the effects of market volatilities on Nextier Oilfield and Flotek Industries 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 Nextier Oilfield with a short position of Flotek Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextier Oilfield and Flotek Industries.
Diversification Opportunities for Nextier Oilfield and Flotek Industries
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nextier and Flotek is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Nextier Oilfield Solutions and Flotek Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flotek Industries and Nextier 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 Nextier Oilfield Solutions are associated (or correlated) with Flotek Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flotek Industries has no effect on the direction of Nextier Oilfield i.e., Nextier Oilfield and Flotek Industries go up and down completely randomly.
Pair Corralation between Nextier Oilfield and Flotek Industries
If you would invest 736.00 in Flotek Industries on October 20, 2024 and sell it today you would earn a total of 148.00 from holding Flotek Industries or generate 20.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Nextier Oilfield Solutions vs. Flotek Industries
Performance |
| Timeline |
| Nextier Oilfield Sol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Flotek Industries |
Nextier Oilfield and Flotek Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextier Oilfield and Flotek Industries
The main advantage of trading using opposite Nextier Oilfield and Flotek Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextier Oilfield position performs unexpectedly, Flotek Industries 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 Flotek Industries will offset losses from the drop in Flotek Industries' long position.| Nextier Oilfield vs. ProPetro Holding Corp | Nextier Oilfield vs. Select Energy Services | Nextier Oilfield vs. Liberty Oilfield Services | Nextier Oilfield vs. Cactus Inc |
| Flotek Industries vs. ProPetro Holding Corp | Flotek Industries vs. Liberty Oilfield Services | Flotek Industries vs. KLX Energy Services | Flotek Industries vs. MRC Global |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |