Correlation Between US Silica and ProPetro Holding

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

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

Diversification Opportunities for US Silica and ProPetro Holding

0.0

Correlation Coefficient

US Silica  ProPetro Holding

Pay attention - limited upside

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

Pair Corralation between US Silica and ProPetro Holding

If you would invest (100.00) in US Silica Holdings on December 27, 2024 and sell it today you would earn a total of  100.00  from holding US Silica Holdings or generate -100.0% return on investment over 90 days.

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

US Silica Holdings  vs.  ProPetro Holding Corp

US Silica Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days US Silica Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, US Silica is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with US Silica and ProPetro Holding

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

The idea behind US Silica Holdings and ProPetro Holding Corp 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.