Correlation Between Nine Energy and Series Portfolios
Can any of the company-specific risk be diversified away by investing in both Nine Energy and Series Portfolios 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 Nine Energy and Series Portfolios into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nine Energy Service and Series Portfolios Trust, you can compare the effects of market volatilities on Nine Energy and Series Portfolios 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 Nine Energy with a short position of Series Portfolios. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Energy and Series Portfolios.
Diversification Opportunities for Nine Energy and Series Portfolios
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nine and Series is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nine Energy Service and Series Portfolios Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Series Portfolios Trust and Nine Energy 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 Nine Energy Service are associated (or correlated) with Series Portfolios. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Series Portfolios Trust has no effect on the direction of Nine Energy i.e., Nine Energy and Series Portfolios go up and down completely randomly.
Pair Corralation between Nine Energy and Series Portfolios
Given the investment horizon of 90 days Nine Energy Service is expected to under-perform the Series Portfolios. In addition to that, Nine Energy is 6.1 times more volatile than Series Portfolios Trust. It trades about -0.04 of its total potential returns per unit of risk. Series Portfolios Trust is currently generating about 0.06 per unit of volatility. If you would invest 3,653 in Series Portfolios Trust on September 12, 2024 and sell it today you would earn a total of 52.19 from holding Series Portfolios Trust or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Energy Service vs. Series Portfolios Trust
Performance |
| Timeline |
| Nine Energy Service |
| Series Portfolios Trust |
Nine Energy and Series Portfolios Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Energy and Series Portfolios
The main advantage of trading using opposite Nine Energy and Series Portfolios positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Energy position performs unexpectedly, Series Portfolios 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 Series Portfolios will offset losses from the drop in Series Portfolios' long position.| Nine Energy vs. Baker Hughes Co | Nine Energy vs. NOV Inc | Nine Energy vs. Weatherford International PLC | Nine Energy vs. Tenaris SA ADR |
| Series Portfolios vs. Vanguard Momentum Factor | Series Portfolios vs. Vanguard Multifactor | Series Portfolios vs. Vanguard Value Factor | Series Portfolios vs. Vanguard Minimum Volatility |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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