Correlation Between ProPetro Holding and Dawson Geophysical
Can any of the company-specific risk be diversified away by investing in both ProPetro Holding and Dawson Geophysical 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 ProPetro Holding and Dawson Geophysical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProPetro Holding Corp and Dawson Geophysical, you can compare the effects of market volatilities on ProPetro Holding and Dawson Geophysical 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 ProPetro Holding with a short position of Dawson Geophysical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProPetro Holding and Dawson Geophysical.
Diversification Opportunities for ProPetro Holding and Dawson Geophysical
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between ProPetro and Dawson is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ProPetro Holding Corp and Dawson Geophysical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dawson Geophysical and ProPetro Holding 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 ProPetro Holding Corp are associated (or correlated) with Dawson Geophysical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dawson Geophysical has no effect on the direction of ProPetro Holding i.e., ProPetro Holding and Dawson Geophysical go up and down completely randomly.
Pair Corralation between ProPetro Holding and Dawson Geophysical
Given the investment horizon of 90 days ProPetro Holding Corp is expected to generate 0.81 times more return on investment than Dawson Geophysical. However, ProPetro Holding Corp is 1.23 times less risky than Dawson Geophysical. It trades about 0.13 of its potential returns per unit of risk. Dawson Geophysical is currently generating about -0.05 per unit of risk. If you would invest 756.00 in ProPetro Holding Corp on August 27, 2024 and sell it today you would earn a total of 94.00 from holding ProPetro Holding Corp or generate 12.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProPetro Holding Corp vs. Dawson Geophysical
Performance |
| Timeline |
| ProPetro Holding Corp |
| Dawson Geophysical |
ProPetro Holding and Dawson Geophysical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProPetro Holding and Dawson Geophysical
The main advantage of trading using opposite ProPetro Holding and Dawson Geophysical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProPetro Holding position performs unexpectedly, Dawson Geophysical 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 Dawson Geophysical will offset losses from the drop in Dawson Geophysical's long position.| ProPetro Holding vs. Ranger Energy Services | ProPetro Holding vs. Newpark Resources | ProPetro Holding vs. RPC Inc | ProPetro Holding vs. Archrock |
| Dawson Geophysical vs. ProPetro Holding Corp | Dawson Geophysical vs. RPC Inc | Dawson Geophysical vs. MRC Global | Dawson Geophysical vs. Expro Group Holdings |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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