Correlation Between Ranger Energy and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both Ranger Energy and Baker Hughes 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 Baker Hughes 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 Baker Hughes Co, you can compare the effects of market volatilities on Ranger Energy and Baker Hughes 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 Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ranger Energy and Baker Hughes.
Diversification Opportunities for Ranger Energy and Baker Hughes
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ranger and Baker is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ranger Energy Services and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes 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 Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of Ranger Energy i.e., Ranger Energy and Baker Hughes go up and down completely randomly.
Pair Corralation between Ranger Energy and Baker Hughes
Given the investment horizon of 90 days Ranger Energy Services is expected to generate 1.3 times more return on investment than Baker Hughes. However, Ranger Energy is 1.3 times more volatile than Baker Hughes Co. It trades about 0.11 of its potential returns per unit of risk. Baker Hughes Co is currently generating about 0.11 per unit of risk. If you would invest 926.00 in Ranger Energy Services on November 9, 2024 and sell it today you would earn a total of 723.00 from holding Ranger Energy Services or generate 78.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ranger Energy Services vs. Baker Hughes Co
Performance |
| Timeline |
| Ranger Energy Services |
| Baker Hughes |
Ranger Energy and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ranger Energy and Baker Hughes
The main advantage of trading using opposite Ranger Energy and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ranger Energy position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.| Ranger Energy vs. ProPetro Holding Corp | Ranger Energy vs. RPC Inc | Ranger Energy vs. MRC Global | Ranger Energy vs. Oil States International |
| Baker Hughes vs. Schlumberger NV | Baker Hughes vs. NOV Inc | Baker Hughes vs. Weatherford International PLC | Baker Hughes vs. Tenaris SA ADR |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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