Correlation Between ProFrac Holding and Profire Ene

Can any of the company-specific risk be diversified away by investing in both ProFrac Holding and Profire Ene 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 Profire Ene 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 Profire Ene, you can compare the effects of market volatilities on ProFrac Holding and Profire Ene 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 Profire Ene. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProFrac Holding and Profire Ene.

Diversification Opportunities for ProFrac Holding and Profire Ene

0.0

Correlation Coefficient

ProFrac Holding  Profire Ene

Pay attention - limited upside

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

Pair Corralation between ProFrac Holding and Profire Ene

If you would invest (100.00) in Profire Ene on December 2, 2024 and sell it today you would earn a total of  100.00  from holding Profire Ene or generate -100.0% return on investment over 90 days.

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

ProFrac Holding Corp  vs.  Profire Ene

ProFrac Holding Corp

Risk-Adjusted Performance

Very 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 weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Profire Ene

Risk-Adjusted Performance

Very Weak

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

Pair Trading with ProFrac Holding and Profire Ene

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

The idea behind ProFrac Holding Corp and Profire Ene 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.