Correlation Between Enservco and Liberty Oilfield

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

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

Diversification Opportunities for Enservco and Liberty Oilfield

0.0

Correlation Coefficient

Enservco  Liberty Oilfield

Pay attention - limited upside

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

Pair Corralation between Enservco and Liberty Oilfield

If you would invest  1,336  in Liberty Oilfield Services on December 2, 2024 and sell it today you would earn a total of  391.00  from holding Liberty Oilfield Services or generate 29.27% return on investment over 90 days.

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

Enservco Co  vs.  Liberty Oilfield Services

Enservco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enservco Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Enservco is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Liberty Oilfield Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Liberty Oilfield Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Liberty Oilfield is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Enservco and Liberty Oilfield

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

The idea behind Enservco Co and Liberty Oilfield Services 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.