Correlation Between ChampionX and Tidewater

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

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

Diversification Opportunities for ChampionX and Tidewater

0.51

Correlation Coefficient

ChampionX  Tidewater

Very weak diversification

The 3 months correlation between ChampionX and Tidewater is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding ChampionX and Tidewater in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidewater and ChampionX 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 ChampionX are associated (or correlated) with Tidewater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidewater has no effect on the direction of ChampionX i.e., ChampionX and Tidewater go up and down completely randomly.

Pair Corralation between ChampionX and Tidewater

Considering the 90-day investment horizon ChampionX is expected to under-perform the Tidewater. But the stock apears to be less risky and, when comparing its historical volatility, ChampionX is 1.59 times less risky than Tidewater. The stock trades about 0.0 of its potential returns per unit of risk. The Tidewater is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  5,879  in Tidewater on October 3, 2024 and sell it today you would lose (559.00) from holding Tidewater or give up 9.51% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

ChampionX  vs.  Tidewater

ChampionX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChampionX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Tidewater

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tidewater has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with ChampionX and Tidewater

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

The idea behind ChampionX and Tidewater 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.

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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.