Correlation Between Select Energy and BioNexus Gene
Can any of the company-specific risk be diversified away by investing in both Select Energy and BioNexus Gene 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 Select Energy and BioNexus Gene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Energy Services and BioNexus Gene Lab, you can compare the effects of market volatilities on Select Energy and BioNexus Gene 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 Select Energy with a short position of BioNexus Gene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Energy and BioNexus Gene.
Diversification Opportunities for Select Energy and BioNexus Gene
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Select and BioNexus is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Select Energy Services and BioNexus Gene Lab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioNexus Gene Lab and Select 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 Select Energy Services are associated (or correlated) with BioNexus Gene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioNexus Gene Lab has no effect on the direction of Select Energy i.e., Select Energy and BioNexus Gene go up and down completely randomly.
Pair Corralation between Select Energy and BioNexus Gene
Given the investment horizon of 90 days Select Energy Services is expected to generate 1.51 times more return on investment than BioNexus Gene. However, Select Energy is 1.51 times more volatile than BioNexus Gene Lab. It trades about 0.27 of its potential returns per unit of risk. BioNexus Gene Lab is currently generating about -0.48 per unit of risk. If you would invest 1,072 in Select Energy Services on August 28, 2024 and sell it today you would earn a total of 374.00 from holding Select Energy Services or generate 34.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Select Energy Services vs. BioNexus Gene Lab
Performance |
| Timeline |
| Select Energy Services |
| BioNexus Gene Lab |
Select Energy and BioNexus Gene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Energy and BioNexus Gene
The main advantage of trading using opposite Select Energy and BioNexus Gene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Energy position performs unexpectedly, BioNexus Gene 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 BioNexus Gene will offset losses from the drop in BioNexus Gene's long position.| Select Energy vs. ProPetro Holding Corp | Select Energy vs. RPC Inc | Select Energy vs. MRC Global | Select Energy vs. Expro Group Holdings |
| BioNexus Gene vs. Oil Dri | BioNexus Gene vs. H B Fuller | BioNexus Gene vs. Northern Technologies | BioNexus Gene vs. Cabot |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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