Correlation Between Expro Group and Weatherford International
Can any of the company-specific risk be diversified away by investing in both Expro Group and Weatherford International 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 Weatherford International 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 Weatherford International PLC, you can compare the effects of market volatilities on Expro Group and Weatherford International 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 Weatherford International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expro Group and Weatherford International.
Diversification Opportunities for Expro Group and Weatherford International
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Expro and Weatherford is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Expro Group Holdings and Weatherford International PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weatherford International 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 Weatherford International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weatherford International has no effect on the direction of Expro Group i.e., Expro Group and Weatherford International go up and down completely randomly.
Pair Corralation between Expro Group and Weatherford International
Given the investment horizon of 90 days Expro Group Holdings is expected to under-perform the Weatherford International. In addition to that, Expro Group is 1.09 times more volatile than Weatherford International PLC. It trades about 0.0 of its total potential returns per unit of risk. Weatherford International PLC is currently generating about 0.07 per unit of volatility. If you would invest 4,128 in Weatherford International PLC on August 25, 2024 and sell it today you would earn a total of 4,455 from holding Weatherford International PLC or generate 107.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expro Group Holdings vs. Weatherford International PLC
Performance |
| Timeline |
| Expro Group Holdings |
| Weatherford International |
Expro Group and Weatherford International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expro Group and Weatherford International
The main advantage of trading using opposite Expro Group and Weatherford International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expro Group position performs unexpectedly, Weatherford International 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 Weatherford International will offset losses from the drop in Weatherford International's long position.| Expro Group vs. ChampionX | Expro Group vs. Ranger Energy Services | Expro Group vs. Cactus Inc | Expro Group vs. MRC Global |
| Weatherford International vs. Bristow Group | Weatherford International vs. RPC Inc | Weatherford International vs. NOV Inc | Weatherford International vs. Oceaneering International |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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