Correlation Between Ranger Energy and Auri
Can any of the company-specific risk be diversified away by investing in both Ranger Energy and Auri 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 Ranger Energy and Auri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ranger Energy Services and Auri Inc, you can compare the effects of market volatilities on Ranger Energy and Auri 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 Ranger Energy with a short position of Auri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ranger Energy and Auri.
Diversification Opportunities for Ranger Energy and Auri
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ranger and Auri is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ranger Energy Services and Auri Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auri Inc and Ranger 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 Ranger Energy Services are associated (or correlated) with Auri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auri Inc has no effect on the direction of Ranger Energy i.e., Ranger Energy and Auri go up and down completely randomly.
Pair Corralation between Ranger Energy and Auri
Given the investment horizon of 90 days Ranger Energy is expected to generate 29.17 times less return on investment than Auri. But when comparing it to its historical volatility, Ranger Energy Services is 12.16 times less risky than Auri. It trades about 0.05 of its potential returns per unit of risk. Auri Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 0.11 in Auri Inc on September 2, 2024 and sell it today you would lose (0.09) from holding Auri Inc or give up 81.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ranger Energy Services vs. Auri Inc
Performance |
| Timeline |
| Ranger Energy Services |
| Auri Inc |
Ranger Energy and Auri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ranger Energy and Auri
The main advantage of trading using opposite Ranger Energy and Auri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ranger Energy position performs unexpectedly, Auri 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 Auri will offset losses from the drop in Auri's long position.| Ranger Energy vs. Newpark Resources | Ranger Energy vs. ProPetro Holding Corp | Ranger Energy vs. RPC Inc | Ranger Energy vs. MRC Global |
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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