Correlation Between Helix Energy and ProFrac Holding

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

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

Diversification Opportunities for Helix Energy and ProFrac Holding

0.47

Correlation Coefficient

Helix Energy  ProFrac Holding

Very weak diversification

The 3 months correlation between Helix and ProFrac is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Helix Energy Solutions and ProFrac Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProFrac Holding Corp and Helix Energy 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 Helix Energy Solutions are associated (or correlated) with ProFrac Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProFrac Holding Corp has no effect on the direction of Helix Energy i.e., Helix Energy and ProFrac Holding go up and down completely randomly.

Pair Corralation between Helix Energy and ProFrac Holding

Considering the 90-day investment horizon Helix Energy Solutions is expected to under-perform the ProFrac Holding. But the stock apears to be less risky and, when comparing its historical volatility, Helix Energy Solutions is 1.49 times less risky than ProFrac Holding. The stock trades about -0.03 of its potential returns per unit of risk. The ProFrac Holding Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  786.00  in ProFrac Holding Corp on December 28, 2024 and sell it today you would earn a total of  34.00  from holding ProFrac Holding Corp or generate 4.33% return on investment over 90 days.

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

Helix Energy Solutions  vs.  ProFrac Holding Corp

Helix Energy Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Helix Energy Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Helix Energy is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

ProFrac Holding Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ProFrac Holding Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak fundamental indicators, ProFrac Holding may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Helix Energy and ProFrac Holding

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

The idea behind Helix Energy Solutions and ProFrac Holding Corp 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.