Correlation Between ProFrac Holding and NR Old

Can any of the company-specific risk be diversified away by investing in both ProFrac Holding and NR Old 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 ProFrac Holding and NR Old into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ProFrac Holding Corp and NR Old, you can compare the effects of market volatilities on ProFrac Holding and NR Old 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 ProFrac Holding with a short position of NR Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProFrac Holding and NR Old.

Diversification Opportunities for ProFrac Holding and NR Old

0.0

Correlation Coefficient

ProFrac Holding  NR Old

Pay attention - limited upside

The 3 months correlation between ProFrac and NR Old is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ProFrac Holding Corp and NR Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NR Old and ProFrac Holding 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 ProFrac Holding Corp are associated (or correlated) with NR Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NR Old has no effect on the direction of ProFrac Holding i.e., ProFrac Holding and NR Old go up and down completely randomly.

Pair Corralation between ProFrac Holding and NR Old

If you would invest  786.00  in ProFrac Holding Corp on December 28, 2024 and sell it today you would lose (15.00) from holding ProFrac Holding Corp or give up 1.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ProFrac Holding Corp  vs.  NR Old

ProFrac Holding Corp

Risk-Adjusted Performance

Weak

Over the last 90 days ProFrac Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, ProFrac Holding is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

NR Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days NR Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, NR Old is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with ProFrac Holding and NR Old

The main advantage of trading using opposite ProFrac Holding and NR Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProFrac Holding position performs unexpectedly, NR Old 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 NR Old will offset losses from the drop in NR Old's long position.

The idea behind ProFrac Holding Corp and NR Old pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.