Correlation Between ProPetro Holding and Expro Group

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

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

Diversification Opportunities for ProPetro Holding and Expro Group

0.89

Correlation Coefficient

ProPetro Holding  Expro Group

Very poor diversification

The 3 months correlation between ProPetro and Expro is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding ProPetro Holding Corp and Expro Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expro Group Holdings and ProPetro Holding 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 ProPetro Holding Corp are associated (or correlated) with Expro Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expro Group Holdings has no effect on the direction of ProPetro Holding i.e., ProPetro Holding and Expro Group go up and down completely randomly.

Pair Corralation between ProPetro Holding and Expro Group

Given the investment horizon of 90 days ProPetro Holding Corp is expected to under-perform the Expro Group. In addition to that, ProPetro Holding is 1.0 times more volatile than Expro Group Holdings. It trades about -0.11 of its total potential returns per unit of risk. Expro Group Holdings is currently generating about -0.06 per unit of volatility. If you would invest  1,206  in Expro Group Holdings on December 29, 2024 and sell it today you would lose (152.00) from holding Expro Group Holdings or give up 12.6% of portfolio value over 90 days.

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

ProPetro Holding Corp  vs.  Expro Group Holdings

ProPetro Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProPetro Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's primary indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Expro Group Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Expro Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with ProPetro Holding and Expro Group

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

The idea behind ProPetro Holding Corp and Expro Group Holdings 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.