Correlation Between ProPetro Holding and Kodiak Gas
Can any of the company-specific risk be diversified away by investing in both ProPetro Holding and Kodiak Gas 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 Kodiak Gas 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 Kodiak Gas Services,, you can compare the effects of market volatilities on ProPetro Holding and Kodiak Gas 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 Kodiak Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProPetro Holding and Kodiak Gas.
Diversification Opportunities for ProPetro Holding and Kodiak Gas
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ProPetro and Kodiak is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding ProPetro Holding Corp and Kodiak Gas Services, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kodiak Gas Services, 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 Kodiak Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kodiak Gas Services, has no effect on the direction of ProPetro Holding i.e., ProPetro Holding and Kodiak Gas go up and down completely randomly.
Pair Corralation between ProPetro Holding and Kodiak Gas
Given the investment horizon of 90 days ProPetro Holding is expected to generate 1.81 times less return on investment than Kodiak Gas. In addition to that, ProPetro Holding is 2.12 times more volatile than Kodiak Gas Services,. It trades about 0.13 of its total potential returns per unit of risk. Kodiak Gas Services, is currently generating about 0.49 per unit of volatility. If you would invest 3,129 in Kodiak Gas Services, on August 27, 2024 and sell it today you would earn a total of 843.00 from holding Kodiak Gas Services, or generate 26.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ProPetro Holding Corp vs. Kodiak Gas Services,
Performance |
| Timeline |
| ProPetro Holding Corp |
| Kodiak Gas Services, |
ProPetro Holding and Kodiak Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProPetro Holding and Kodiak Gas
The main advantage of trading using opposite ProPetro Holding and Kodiak Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProPetro Holding position performs unexpectedly, Kodiak Gas 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 Kodiak Gas will offset losses from the drop in Kodiak Gas' long position.| ProPetro Holding vs. Ranger Energy Services | ProPetro Holding vs. Newpark Resources | ProPetro Holding vs. RPC Inc | ProPetro Holding vs. Archrock |
| Kodiak Gas vs. ProPetro Holding Corp | Kodiak Gas vs. RPC Inc | Kodiak Gas vs. MRC Global | Kodiak Gas 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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