Correlation Between Expro Group and Victory Energy
Can any of the company-specific risk be diversified away by investing in both Expro Group and Victory Energy 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 Victory Energy 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 Victory Energy Corp, you can compare the effects of market volatilities on Expro Group and Victory Energy 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 Victory Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expro Group and Victory Energy.
Diversification Opportunities for Expro Group and Victory Energy
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Expro and Victory is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Expro Group Holdings and Victory Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Energy Corp 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 Victory Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Energy Corp has no effect on the direction of Expro Group i.e., Expro Group and Victory Energy go up and down completely randomly.
Pair Corralation between Expro Group and Victory Energy
Given the investment horizon of 90 days Expro Group is expected to generate 43.76 times less return on investment than Victory Energy. But when comparing it to its historical volatility, Expro Group Holdings is 34.23 times less risky than Victory Energy. It trades about 0.14 of its potential returns per unit of risk. Victory Energy Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 50.00 in Victory Energy Corp on September 3, 2024 and sell it today you would lose (20.00) from holding Victory Energy Corp or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expro Group Holdings vs. Victory Energy Corp
Performance |
| Timeline |
| Expro Group Holdings |
| Victory Energy Corp |
Expro Group and Victory Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expro Group and Victory Energy
The main advantage of trading using opposite Expro Group and Victory Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expro Group position performs unexpectedly, Victory Energy 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 Victory Energy will offset losses from the drop in Victory Energy's long position.| Expro Group vs. ChampionX | Expro Group vs. Ranger Energy Services | Expro Group vs. Cactus Inc | Expro Group vs. MRC Global |
| Victory Energy vs. Expro Group Holdings | Victory Energy vs. ChampionX | Victory Energy vs. Ranger Energy Services | Victory Energy 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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