Correlation Between Solaris Oilfield and Expro Group

Can any of the company-specific risk be diversified away by investing in both Solaris Oilfield and Expro Group 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 Solaris Oilfield and Expro Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Solaris Oilfield Infrastructure and Expro Group Holdings, you can compare the effects of market volatilities on Solaris Oilfield and Expro Group 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 Solaris Oilfield with a short position of Expro Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solaris Oilfield and Expro Group.

Diversification Opportunities for Solaris Oilfield and Expro Group

-0.55

Correlation Coefficient

Solaris Oilfield  Expro Group

Excellent diversification

The 3 months correlation between Solaris and Expro is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Solaris Oilfield Infrastructur and Expro Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expro Group Holdings and Solaris Oilfield 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 Solaris Oilfield Infrastructure are associated (or correlated) with Expro Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expro Group Holdings has no effect on the direction of Solaris Oilfield i.e., Solaris Oilfield and Expro Group go up and down completely randomly.

Pair Corralation between Solaris Oilfield and Expro Group

Considering the 90-day investment horizon Solaris Oilfield Infrastructure is expected to generate 1.76 times more return on investment than Expro Group. However, Solaris Oilfield is 1.76 times more volatile than Expro Group Holdings. It trades about 0.11 of its potential returns per unit of risk. Expro Group Holdings is currently generating about -0.09 per unit of risk. If you would invest  835.00  in Solaris Oilfield Infrastructure on September 3, 2024 and sell it today you would earn a total of  317.00  from holding Solaris Oilfield Infrastructure or generate 37.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	56.0%
Values	Daily Returns

Solaris Oilfield Infrastructur  vs.  Expro Group Holdings

Solaris Oilfield Inf

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Solaris Oilfield Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic 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.

Expro Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expro Group Holdings 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 very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Solaris Oilfield and Expro Group

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

The idea behind Solaris Oilfield Infrastructure and Expro Group 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.