Correlation Between ProPetro Holding and Nextier Oilfield
Can any of the company-specific risk be diversified away by investing in both ProPetro Holding and Nextier Oilfield 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 Nextier Oilfield 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 Nextier Oilfield Solutions, you can compare the effects of market volatilities on ProPetro Holding and Nextier Oilfield 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 Nextier Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProPetro Holding and Nextier Oilfield.
Diversification Opportunities for ProPetro Holding and Nextier Oilfield
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ProPetro and Nextier is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProPetro Holding Corp and Nextier Oilfield Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextier Oilfield Sol 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 Nextier Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextier Oilfield Sol has no effect on the direction of ProPetro Holding i.e., ProPetro Holding and Nextier Oilfield go up and down completely randomly.
Pair Corralation between ProPetro Holding and Nextier Oilfield
If you would invest 895.00 in ProPetro Holding Corp on October 20, 2024 and sell it today you would earn a total of 195.00 from holding ProPetro Holding Corp or generate 21.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
ProPetro Holding Corp vs. Nextier Oilfield Solutions
Performance |
| Timeline |
| ProPetro Holding Corp |
| Nextier Oilfield Sol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProPetro Holding and Nextier Oilfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProPetro Holding and Nextier Oilfield
The main advantage of trading using opposite ProPetro Holding and Nextier Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProPetro Holding position performs unexpectedly, Nextier Oilfield 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 Nextier Oilfield will offset losses from the drop in Nextier Oilfield's long position.| ProPetro Holding vs. Ranger Energy Services | ProPetro Holding vs. RPC Inc | ProPetro Holding vs. Archrock | ProPetro Holding vs. Bristow Group |
| Nextier Oilfield vs. ProPetro Holding Corp | Nextier Oilfield vs. Select Energy Services | Nextier Oilfield vs. Liberty Oilfield Services | Nextier Oilfield vs. Cactus Inc |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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