Correlation Between Cactus and Nextier Oilfield
Can any of the company-specific risk be diversified away by investing in both Cactus 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 Cactus and Nextier Oilfield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cactus Inc and Nextier Oilfield Solutions, you can compare the effects of market volatilities on Cactus 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 Cactus with a short position of Nextier Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cactus and Nextier Oilfield.
Diversification Opportunities for Cactus and Nextier Oilfield
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cactus and Nextier is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Cactus Inc 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 Cactus 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 Cactus Inc 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 Cactus i.e., Cactus and Nextier Oilfield go up and down completely randomly.
Pair Corralation between Cactus and Nextier Oilfield
If you would invest 5,693 in Cactus Inc on October 20, 2024 and sell it today you would earn a total of 670.00 from holding Cactus Inc or generate 11.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Cactus Inc vs. Nextier Oilfield Solutions
Performance |
| Timeline |
| Cactus Inc |
| Nextier Oilfield Sol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cactus and Nextier Oilfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cactus and Nextier Oilfield
The main advantage of trading using opposite Cactus and Nextier Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cactus 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.| Cactus vs. ChampionX | Cactus vs. Expro Group Holdings | Cactus vs. Ranger Energy Services | Cactus vs. MRC Global |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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