Correlation Between Expro Group and Smart Sand
Can any of the company-specific risk be diversified away by investing in both Expro Group and Smart Sand 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 Expro Group and Smart Sand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expro Group Holdings and Smart Sand, you can compare the effects of market volatilities on Expro Group and Smart Sand 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 Expro Group with a short position of Smart Sand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expro Group and Smart Sand.
Diversification Opportunities for Expro Group and Smart Sand
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Expro and Smart is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Expro Group Holdings and Smart Sand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart Sand and Expro Group 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 Expro Group Holdings are associated (or correlated) with Smart Sand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart Sand has no effect on the direction of Expro Group i.e., Expro Group and Smart Sand go up and down completely randomly.
Pair Corralation between Expro Group and Smart Sand
Given the investment horizon of 90 days Expro Group Holdings is expected to under-perform the Smart Sand. But the stock apears to be less risky and, when comparing its historical volatility, Expro Group Holdings is 1.29 times less risky than Smart Sand. The stock trades about -0.12 of its potential returns per unit of risk. The Smart Sand is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 214.00 in Smart Sand on August 24, 2024 and sell it today you would earn a total of 18.00 from holding Smart Sand or generate 8.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expro Group Holdings vs. Smart Sand
Performance |
| Timeline |
| Expro Group Holdings |
| Smart Sand |
Expro Group and Smart Sand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expro Group and Smart Sand
The main advantage of trading using opposite Expro Group and Smart Sand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expro Group position performs unexpectedly, Smart Sand 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 Smart Sand will offset losses from the drop in Smart Sand's long position.| Expro Group vs. ChampionX | Expro Group vs. Ranger Energy Services | Expro Group vs. Cactus Inc | Expro Group vs. MRC Global |
| Smart Sand vs. Liberty Oilfield Services | Smart Sand vs. RPC Inc | Smart Sand vs. MRC Global | Smart Sand vs. Ranger Energy Services |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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