Correlation Between Nine Energy and EA Series
Can any of the company-specific risk be diversified away by investing in both Nine Energy and EA Series 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 EA Series 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 EA Series Trust, you can compare the effects of market volatilities on Nine Energy and EA Series 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 EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Energy and EA Series.
Diversification Opportunities for Nine Energy and EA Series
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nine and STXM is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nine Energy Service and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Nine Energy i.e., Nine Energy and EA Series go up and down completely randomly.
Pair Corralation between Nine Energy and EA Series
Given the investment horizon of 90 days Nine Energy Service is expected to generate 8.22 times more return on investment than EA Series. However, Nine Energy is 8.22 times more volatile than EA Series Trust. It trades about 0.3 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.34 per unit of risk. If you would invest 102.00 in Nine Energy Service on September 4, 2024 and sell it today you would earn a total of 66.00 from holding Nine Energy Service or generate 64.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nine Energy Service vs. EA Series Trust
Performance |
| Timeline |
| Nine Energy Service |
| EA Series Trust |
Nine Energy and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nine Energy and EA Series
The main advantage of trading using opposite Nine Energy and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Energy position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' 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 |
| EA Series vs. Sonida Senior Living | EA Series vs. The9 Ltd ADR | EA Series vs. VanEck Vectors ETF | EA Series 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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