Correlation Between TGS ASA and Flotek Industries
Can any of the company-specific risk be diversified away by investing in both TGS ASA and Flotek Industries 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 TGS ASA and Flotek Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TGS ASA and Flotek Industries, you can compare the effects of market volatilities on TGS ASA and Flotek Industries 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 TGS ASA with a short position of Flotek Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of TGS ASA and Flotek Industries.
Diversification Opportunities for TGS ASA and Flotek Industries
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TGS and Flotek is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding TGS ASA and Flotek Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flotek Industries and TGS ASA 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 TGS ASA are associated (or correlated) with Flotek Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flotek Industries has no effect on the direction of TGS ASA i.e., TGS ASA and Flotek Industries go up and down completely randomly.
Pair Corralation between TGS ASA and Flotek Industries
Assuming the 90 days horizon TGS ASA is expected to under-perform the Flotek Industries. But the otc stock apears to be less risky and, when comparing its historical volatility, TGS ASA is 1.43 times less risky than Flotek Industries. The otc stock trades about 0.0 of its potential returns per unit of risk. The Flotek Industries is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 738.00 in Flotek Industries on September 4, 2024 and sell it today you would earn a total of 105.00 from holding Flotek Industries or generate 14.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 71.31% |
| Values | Daily Returns |
TGS ASA vs. Flotek Industries
Performance |
| Timeline |
| TGS ASA |
| Flotek Industries |
TGS ASA and Flotek Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TGS ASA and Flotek Industries
The main advantage of trading using opposite TGS ASA and Flotek Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TGS ASA position performs unexpectedly, Flotek Industries 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 Flotek Industries will offset losses from the drop in Flotek Industries' long position.| TGS ASA vs. Expro Group Holdings | TGS ASA vs. ChampionX | TGS ASA vs. Ranger Energy Services | TGS ASA vs. Cactus Inc |
| Flotek Industries vs. ProPetro Holding Corp | Flotek Industries vs. Liberty Oilfield Services | Flotek Industries vs. KLX Energy Services | Flotek Industries 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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