Correlation Between Select Energy and Nextier Oilfield
Can any of the company-specific risk be diversified away by investing in both Select Energy 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 Select Energy and Nextier Oilfield 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 Nextier Oilfield Solutions, you can compare the effects of market volatilities on Select Energy 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 Select Energy with a short position of Nextier Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Energy and Nextier Oilfield.
Diversification Opportunities for Select Energy and Nextier Oilfield
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Select and Nextier is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Select Energy Services 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 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 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 Select Energy i.e., Select Energy and Nextier Oilfield go up and down completely randomly.
Pair Corralation between Select Energy and Nextier Oilfield
If you would invest 1,245 in Select Energy Services on October 20, 2024 and sell it today you would earn a total of 160.00 from holding Select Energy Services or generate 12.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 5.0% |
| Values | Daily Returns |
Select Energy Services vs. Nextier Oilfield Solutions
Performance |
| Timeline |
| Select Energy Services |
| Nextier Oilfield Sol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Select Energy and Nextier Oilfield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Energy and Nextier Oilfield
The main advantage of trading using opposite Select Energy and Nextier Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Energy 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.| Select Energy vs. Orion Engineered Carbons | Select Energy vs. Element Solutions | Select Energy vs. Kronos Worldwide | Select Energy vs. FutureFuel Corp |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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