Correlation Between Nextier Oilfield and Liberty Oilfield

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

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

Diversification Opportunities for Nextier Oilfield and Liberty Oilfield

0.0

Correlation Coefficient

Nextier Oilfield  Liberty Oilfield

Pay attention - limited upside

The 3 months correlation between Nextier and Liberty is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nextier Oilfield Solutions 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 Nextier Oilfield 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 Nextier Oilfield Solutions 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 Nextier Oilfield i.e., Nextier Oilfield and Liberty Oilfield go up and down completely randomly.

Pair Corralation between Nextier Oilfield and Liberty Oilfield

If you would invest (100.00) in Nextier Oilfield Solutions on December 29, 2024 and sell it today you would earn a total of  100.00  from holding Nextier Oilfield Solutions 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

Nextier Oilfield Solutions  vs.  Liberty Oilfield Services

Nextier Oilfield Sol

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nextier Oilfield Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Nextier Oilfield is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the 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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Nextier Oilfield and Liberty Oilfield

The main advantage of trading using opposite Nextier Oilfield and Liberty Oilfield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nextier Oilfield 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 Nextier Oilfield Solutions 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 Commodity Directory module to find actively traded commodities issued by global exchanges.