Correlation Between Nine Energy and VanEck Vectors
Can any of the company-specific risk be diversified away by investing in both Nine Energy and VanEck Vectors 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 VanEck Vectors 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 VanEck Vectors ETF, you can compare the effects of market volatilities on Nine Energy and VanEck Vectors 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 VanEck Vectors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Energy and VanEck Vectors.
Diversification Opportunities for Nine Energy and VanEck Vectors
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nine and VanEck is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nine Energy Service and VanEck Vectors ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Vectors ETF 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 VanEck Vectors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Vectors ETF has no effect on the direction of Nine Energy i.e., Nine Energy and VanEck Vectors go up and down completely randomly.
Pair Corralation between Nine Energy and VanEck Vectors
Given the investment horizon of 90 days Nine Energy Service is expected to generate 34.92 times more return on investment than VanEck Vectors. However, Nine Energy is 34.92 times more volatile than VanEck Vectors ETF. It trades about 0.04 of its potential returns per unit of risk. VanEck Vectors ETF is currently generating about -0.02 per unit of risk. If you would invest 123.00 in Nine Energy Service on November 3, 2024 and sell it today you would lose (1.00) from holding Nine Energy Service or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Energy Service vs. VanEck Vectors ETF
Performance |
| Timeline |
| Nine Energy Service |
| VanEck Vectors ETF |
Nine Energy and VanEck Vectors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Energy and VanEck Vectors
The main advantage of trading using opposite Nine Energy and VanEck Vectors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Energy position performs unexpectedly, VanEck Vectors 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 VanEck Vectors will offset losses from the drop in VanEck Vectors' long position.| Nine Energy vs. Liberty Oilfield Services | Nine Energy vs. ProFrac Holding Corp | Nine Energy vs. Helix Energy Solutions | Nine Energy vs. Enerflex |
| VanEck Vectors vs. Formidable Fortress ETF | VanEck Vectors vs. Sonida Senior Living | VanEck Vectors vs. China Yuchai International | VanEck Vectors vs. Nine Energy Service |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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