Correlation Between Bristow and ProPetro Holding
Can any of the company-specific risk be diversified away by investing in both Bristow and ProPetro Holding 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 Bristow and ProPetro Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bristow Group and ProPetro Holding Corp, you can compare the effects of market volatilities on Bristow and ProPetro Holding 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 Bristow with a short position of ProPetro Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bristow and ProPetro Holding.
Diversification Opportunities for Bristow and ProPetro Holding
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bristow and ProPetro is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bristow Group and ProPetro Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProPetro Holding Corp and Bristow 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 Bristow Group are associated (or correlated) with ProPetro Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProPetro Holding Corp has no effect on the direction of Bristow i.e., Bristow and ProPetro Holding go up and down completely randomly.
Pair Corralation between Bristow and ProPetro Holding
Given the investment horizon of 90 days Bristow is expected to generate 1.25 times less return on investment than ProPetro Holding. But when comparing it to its historical volatility, Bristow Group is 2.03 times less risky than ProPetro Holding. It trades about 0.21 of its potential returns per unit of risk. ProPetro Holding Corp is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 754.00 in ProPetro Holding Corp on August 30, 2024 and sell it today you would earn a total of 94.00 from holding ProPetro Holding Corp or generate 12.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bristow Group vs. ProPetro Holding Corp
Performance |
| Timeline |
| Bristow Group |
| ProPetro Holding Corp |
Bristow and ProPetro Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bristow and ProPetro Holding
The main advantage of trading using opposite Bristow and ProPetro Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristow position performs unexpectedly, ProPetro Holding 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 ProPetro Holding will offset losses from the drop in ProPetro Holding's long position.| Bristow vs. Oil States International | Bristow vs. Geospace Technologies | Bristow vs. Weatherford International PLC | Bristow vs. Enerflex |
| ProPetro Holding vs. Ranger Energy Services | ProPetro Holding vs. Newpark Resources | ProPetro Holding vs. RPC Inc | ProPetro Holding vs. Archrock |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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