Correlation Between Ranger Energy and SEACOR Marine

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

Diversification Opportunities for Ranger Energy and SEACOR Marine

-0.82

Correlation Coefficient

Ranger Energy  SEACOR Marine

Pay attention - limited upside

The 3 months correlation between Ranger and SEACOR is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ranger Energy Services and SEACOR Marine Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEACOR Marine Holdings 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 SEACOR Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEACOR Marine Holdings has no effect on the direction of Ranger Energy i.e., Ranger Energy and SEACOR Marine go up and down completely randomly.

Pair Corralation between Ranger Energy and SEACOR Marine

Given the investment horizon of 90 days Ranger Energy Services is expected to under-perform the SEACOR Marine. But the stock apears to be less risky and, when comparing its historical volatility, Ranger Energy Services is 1.98 times less risky than SEACOR Marine. The stock trades about -0.3 of its potential returns per unit of risk. The SEACOR Marine Holdings is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest  692.00  in SEACOR Marine Holdings on September 26, 2024 and sell it today you would lose (76.00) from holding SEACOR Marine Holdings or give up 10.98% of portfolio value over 90 days.

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

Ranger Energy Services  vs.  SEACOR Marine Holdings

Ranger Energy Services

Risk-Adjusted Performance

16 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ranger Energy Services are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting technical and fundamental indicators, Ranger Energy reported solid returns over the last few months and may actually be approaching a breakup point.

SEACOR Marine Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SEACOR Marine Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Ranger Energy and SEACOR Marine

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

The idea behind Ranger Energy Services and SEACOR Marine 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.

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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.