Correlation Between Texas Gulf and Expro Group

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

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

Diversification Opportunities for Texas Gulf and Expro Group

0.49

Correlation Coefficient

Texas Gulf  Expro Group

Very weak diversification

The 3 months correlation between Texas and Expro is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Texas Gulf Energy 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 Texas Gulf 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 Texas Gulf Energy 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 Texas Gulf i.e., Texas Gulf and Expro Group go up and down completely randomly.

Pair Corralation between Texas Gulf and Expro Group

Given the investment horizon of 90 days Texas Gulf is expected to generate 3.68 times less return on investment than Expro Group. In addition to that, Texas Gulf is 1.23 times more volatile than Expro Group Holdings. It trades about 0.19 of its total potential returns per unit of risk. Expro Group Holdings is currently generating about 0.85 per unit of volatility. If you would invest  1,180  in Expro Group Holdings on October 22, 2024 and sell it today you would earn a total of  303.00  from holding Expro Group Holdings or generate 25.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.74%
Values	Daily Returns

Texas Gulf Energy  vs.  Expro Group Holdings

Texas Gulf Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Texas Gulf Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 very healthy basic indicators, Expro Group is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Texas Gulf and Expro Group

The main advantage of trading using opposite Texas Gulf and Expro Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Texas Gulf 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 Texas Gulf Energy 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.