Correlation Between Ranger Energy and Akastor ASA

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

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

Diversification Opportunities for Ranger Energy and Akastor ASA

-0.25

Correlation Coefficient

Ranger Energy  Akastor ASA

Very good diversification

The 3 months correlation between Ranger and Akastor is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ranger Energy Services and Akastor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akastor ASA and Ranger 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 Ranger Energy Services are associated (or correlated) with Akastor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akastor ASA has no effect on the direction of Ranger Energy i.e., Ranger Energy and Akastor ASA go up and down completely randomly.

Pair Corralation between Ranger Energy and Akastor ASA

If you would invest  1,464  in Ranger Energy Services on December 26, 2024 and sell it today you would earn a total of  20.00  from holding Ranger Energy Services or generate 1.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Ranger Energy Services  vs.  Akastor ASA

Ranger Energy Services

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ranger Energy Services are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Ranger Energy is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Akastor ASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Akastor ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Akastor ASA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ranger Energy and Akastor ASA

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

The idea behind Ranger Energy Services and Akastor ASA 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.