Correlation Between Nine Energy and US Silica
Can any of the company-specific risk be diversified away by investing in both Nine Energy and US Silica 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 US Silica 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 US Silica Holdings, you can compare the effects of market volatilities on Nine Energy and US Silica 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 US Silica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Energy and US Silica.
Diversification Opportunities for Nine Energy and US Silica
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nine and SLCA is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nine Energy Service and US Silica Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Silica Holdings 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 US Silica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Silica Holdings has no effect on the direction of Nine Energy i.e., Nine Energy and US Silica go up and down completely randomly.
Pair Corralation between Nine Energy and US Silica
If you would invest 114.00 in Nine Energy Service on September 2, 2024 and sell it today you would earn a total of 61.00 from holding Nine Energy Service or generate 53.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
Nine Energy Service vs. US Silica Holdings
Performance |
| Timeline |
| Nine Energy Service |
| US Silica Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Nine Energy and US Silica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Energy and US Silica
The main advantage of trading using opposite Nine Energy and US Silica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Energy position performs unexpectedly, US Silica 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 US Silica will offset losses from the drop in US Silica'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 |
| US Silica vs. Newpark Resources | US Silica vs. North American Construction | US Silica vs. ProPetro Holding Corp | US Silica vs. Ranger Energy Services |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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