Correlation Between SOI Old and Ranger Energy

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

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

Diversification Opportunities for SOI Old and Ranger Energy

0.76

Correlation Coefficient

SOI Old  Ranger Energy

Poor diversification

The 3 months correlation between SOI and Ranger is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding SOI Old 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 SOI Old 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 SOI Old 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 SOI Old i.e., SOI Old and Ranger Energy go up and down completely randomly.

Pair Corralation between SOI Old and Ranger Energy

If you would invest  1,577  in Ranger Energy Services on October 9, 2024 and sell it today you would earn a total of  23.00  from holding Ranger Energy Services or generate 1.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.26%
Values	Daily Returns

SOI Old  vs.  Ranger Energy Services

SOI Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SOI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, SOI Old is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Ranger Energy Services

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ranger Energy Services are ranked lower than 18 (%) 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 SOI Old and Ranger Energy

The main advantage of trading using opposite SOI Old and Ranger Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOI Old 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 SOI Old 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.