Correlation Between Ranger Energy and Enservco

Can any of the company-specific risk be diversified away by investing in both Ranger Energy and Enservco 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 Enservco 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 Enservco Co, you can compare the effects of market volatilities on Ranger Energy and Enservco 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 Enservco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ranger Energy and Enservco.

Diversification Opportunities for Ranger Energy and Enservco

-0.03

Correlation Coefficient

Ranger Energy  Enservco

Good diversification

The 3 months correlation between Ranger and Enservco is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ranger Energy Services and Enservco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enservco 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 Enservco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enservco has no effect on the direction of Ranger Energy i.e., Ranger Energy and Enservco go up and down completely randomly.

Pair Corralation between Ranger Energy and Enservco

Given the investment horizon of 90 days Ranger Energy Services is expected to generate 0.31 times more return on investment than Enservco. However, Ranger Energy Services is 3.22 times less risky than Enservco. It trades about 0.07 of its potential returns per unit of risk. Enservco Co is currently generating about -0.06 per unit of risk. If you would invest  1,039  in Ranger Energy Services on September 20, 2024 and sell it today you would earn a total of  389.00  from holding Ranger Energy Services or generate 37.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	88.35%
Values	Daily Returns

Ranger Energy Services  vs.  Enservco Co

Ranger Energy Services

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ranger Energy Services are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Ranger Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Enservco

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enservco Co 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 fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Ranger Energy and Enservco

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

The idea behind Ranger Energy Services and Enservco Co 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.