Correlation Between Greenway Technologies and Ranger Energy

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

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

Diversification Opportunities for Greenway Technologies and Ranger Energy

0.79

Correlation Coefficient

Greenway Technologies  Ranger Energy

Poor diversification

The 3 months correlation between Greenway and Ranger is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Greenway Technologies and Ranger Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ranger Energy Services and Greenway Technologies 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 Greenway Technologies are associated (or correlated) with Ranger Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ranger Energy Services has no effect on the direction of Greenway Technologies i.e., Greenway Technologies and Ranger Energy go up and down completely randomly.

Pair Corralation between Greenway Technologies and Ranger Energy

Given the investment horizon of 90 days Greenway Technologies is expected to generate 47.76 times more return on investment than Ranger Energy. However, Greenway Technologies is 47.76 times more volatile than Ranger Energy Services. It trades about 0.13 of its potential returns per unit of risk. Ranger Energy Services is currently generating about 0.13 per unit of risk. If you would invest  1.00  in Greenway Technologies on September 30, 2024 and sell it today you would earn a total of  3.00  from holding Greenway Technologies or generate 300.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.21%
Values	Daily Returns

Greenway Technologies  vs.  Ranger Energy Services

Greenway Technologies

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Greenway Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, Greenway Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Ranger Energy Services

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ranger Energy Services are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Ranger Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Greenway Technologies and Ranger Energy

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

The idea behind Greenway Technologies and Ranger Energy 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.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.