Correlation Between Nine Energy and Running Oak

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

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

Diversification Opportunities for Nine Energy and Running Oak

0.0

Correlation Coefficient

Nine Energy  Running Oak

Pay attention - limited upside

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

Pair Corralation between Nine Energy and Running Oak

If you would invest  99.00  in Nine Energy Service on December 28, 2024 and sell it today you would earn a total of  25.00  from holding Nine Energy Service or generate 25.25% return on investment over 90 days.

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

Nine Energy Service  vs.  Running Oak Efficient

Nine Energy Service

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nine Energy Service are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Nine Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Running Oak Efficient

Risk-Adjusted Performance

Very Weak

Over the last 90 days Running Oak Efficient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Running Oak is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nine Energy and Running Oak

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

The idea behind Nine Energy Service and Running Oak Efficient 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.