Correlation Between Nine Energy and National Energy
Can any of the company-specific risk be diversified away by investing in both Nine Energy and National Energy 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 National Energy 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 National Energy Services, you can compare the effects of market volatilities on Nine Energy and National Energy 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 National Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Energy and National Energy.
Diversification Opportunities for Nine Energy and National Energy
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nine and National is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Nine Energy Service and National Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Energy Services 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 National Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Energy Services has no effect on the direction of Nine Energy i.e., Nine Energy and National Energy go up and down completely randomly.
Pair Corralation between Nine Energy and National Energy
Given the investment horizon of 90 days Nine Energy Service is expected to generate 2.69 times more return on investment than National Energy. However, Nine Energy is 2.69 times more volatile than National Energy Services. It trades about 0.1 of its potential returns per unit of risk. National Energy Services is currently generating about -0.06 per unit of risk. If you would invest 115.00 in Nine Energy Service on August 28, 2024 and sell it today you would earn a total of 26.00 from holding Nine Energy Service or generate 22.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Energy Service vs. National Energy Services
Performance |
| Timeline |
| Nine Energy Service |
| National Energy Services |
Nine Energy and National Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Energy and National Energy
The main advantage of trading using opposite Nine Energy and National Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Energy position performs unexpectedly, National Energy 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 National Energy will offset losses from the drop in National Energy's long position.| Nine Energy vs. Liberty Oilfield Services | Nine Energy vs. ProFrac Holding Corp | Nine Energy vs. Helix Energy Solutions | Nine Energy vs. Newpark Resources |
| National Energy vs. Dawson Geophysical | National Energy vs. Mccoy Global | National Energy vs. Ranger Energy Services | National Energy 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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