Correlation Between SEACOR Marine and Ranger Energy

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

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

Diversification Opportunities for SEACOR Marine and Ranger Energy

-0.76

Correlation Coefficient

SEACOR Marine  Ranger Energy

Pay attention - limited upside

The 3 months correlation between SEACOR and Ranger is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding SEACOR Marine Holdings and Ranger Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ranger Energy Services and SEACOR Marine 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 SEACOR Marine Holdings are associated (or correlated) with Ranger Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ranger Energy Services has no effect on the direction of SEACOR Marine i.e., SEACOR Marine and Ranger Energy go up and down completely randomly.

Pair Corralation between SEACOR Marine and Ranger Energy

Given the investment horizon of 90 days SEACOR Marine Holdings is expected to under-perform the Ranger Energy. In addition to that, SEACOR Marine is 1.35 times more volatile than Ranger Energy Services. It trades about -0.01 of its total potential returns per unit of risk. Ranger Energy Services is currently generating about 0.05 per unit of volatility. If you would invest  1,065  in Ranger Energy Services on October 13, 2024 and sell it today you would earn a total of  519.00  from holding Ranger Energy Services or generate 48.73% return on investment over 90 days.

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

SEACOR Marine Holdings  vs.  Ranger Energy Services

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 February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Ranger Energy Services

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ranger Energy Services are ranked lower than 15 (%) 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.

Pair Trading with SEACOR Marine and Ranger Energy

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

The idea behind SEACOR Marine Holdings and Ranger Energy Services 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..