Correlation Between Profire Ene and Cactus

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

By analyzing existing cross correlation between Profire Ene and Cactus Inc, you can compare the effects of market volatilities on Profire Ene and Cactus 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 Profire Ene with a short position of Cactus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profire Ene and Cactus.

Diversification Opportunities for Profire Ene and Cactus

0.0

Correlation Coefficient

Profire Ene  Cactus

Pay attention - limited upside

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

Pair Corralation between Profire Ene and Cactus

If you would invest  3,962  in Cactus Inc on December 2, 2024 and sell it today you would earn a total of  1,292  from holding Cactus Inc or generate 32.61% return on investment over 90 days.

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

Profire Ene  vs.  Cactus Inc

Profire Ene

Risk-Adjusted Performance

Very Weak

Over the last 90 days Profire Ene has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Profire Ene is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Cactus Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cactus Inc 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 technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Profire Ene and Cactus

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

The idea behind Profire Ene and Cactus Inc 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.