Correlation Between Select Energy and Bristow
Can any of the company-specific risk be diversified away by investing in both Select Energy and Bristow 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 Bristow 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 Bristow Group, you can compare the effects of market volatilities on Select Energy and Bristow 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 Bristow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Energy and Bristow.
Diversification Opportunities for Select Energy and Bristow
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Select and Bristow is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Select Energy Services and Bristow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristow Group 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 Bristow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristow Group has no effect on the direction of Select Energy i.e., Select Energy and Bristow go up and down completely randomly.
Pair Corralation between Select Energy and Bristow
Given the investment horizon of 90 days Select Energy Services is expected to generate 1.12 times more return on investment than Bristow. However, Select Energy is 1.12 times more volatile than Bristow Group. It trades about 0.06 of its potential returns per unit of risk. Bristow Group is currently generating about 0.04 per unit of risk. If you would invest 802.00 in Select Energy Services on August 27, 2024 and sell it today you would earn a total of 667.00 from holding Select Energy Services or generate 83.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Select Energy Services vs. Bristow Group
Performance |
| Timeline |
| Select Energy Services |
| Bristow Group |
Select Energy and Bristow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Select Energy and Bristow
The main advantage of trading using opposite Select Energy and Bristow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Energy position performs unexpectedly, Bristow 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 Bristow will offset losses from the drop in Bristow'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 |
| Bristow vs. Oil States International | Bristow vs. Geospace Technologies | Bristow vs. Weatherford International PLC | Bristow vs. Enerflex |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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