Correlation Between Nextier Oilfield and Cactus
Can any of the company-specific risk be diversified away by investing in both Nextier Oilfield and Cactus 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 Cactus 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 Cactus Inc, you can compare the effects of market volatilities on Nextier Oilfield and Cactus 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 Cactus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nextier Oilfield and Cactus.
Diversification Opportunities for Nextier Oilfield and Cactus
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nextier and Cactus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nextier Oilfield Solutions and Cactus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cactus Inc 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 Cactus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cactus Inc has no effect on the direction of Nextier Oilfield i.e., Nextier Oilfield and Cactus go up and down completely randomly.
Pair Corralation between Nextier Oilfield and Cactus
If you would invest 5,828 in Cactus Inc on August 26, 2024 and sell it today you would earn a total of 1,071 from holding Cactus Inc or generate 18.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Nextier Oilfield Solutions vs. Cactus Inc
Performance |
| Timeline |
| Nextier Oilfield Sol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cactus Inc |
Nextier Oilfield and Cactus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nextier Oilfield and Cactus
The main advantage of trading using opposite Nextier Oilfield and Cactus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextier Oilfield position performs unexpectedly, Cactus 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 Cactus will offset losses from the drop in Cactus' 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 |
| Cactus vs. ProPetro Holding Corp | Cactus vs. RPC Inc | Cactus vs. MRC Global | Cactus 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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