Correlation Between Bristow and ProPetro Holding

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

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

Diversification Opportunities for Bristow and ProPetro Holding

0.74

Correlation Coefficient

Bristow  ProPetro Holding

Poor diversification

The 3 months correlation between Bristow and ProPetro is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bristow Group 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 Bristow 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 Bristow Group 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 Bristow i.e., Bristow and ProPetro Holding go up and down completely randomly.

Pair Corralation between Bristow and ProPetro Holding

Given the investment horizon of 90 days Bristow Group is expected to generate 0.76 times more return on investment than ProPetro Holding. However, Bristow Group is 1.31 times less risky than ProPetro Holding. It trades about -0.03 of its potential returns per unit of risk. ProPetro Holding Corp is currently generating about -0.11 per unit of risk. If you would invest  3,360  in Bristow Group on December 30, 2024 and sell it today you would lose (178.00) from holding Bristow Group or give up 5.3% of portfolio value over 90 days.

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

Bristow Group  vs.  ProPetro Holding Corp

Bristow Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bristow Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Bristow is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional 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 Bristow and ProPetro Holding

The main advantage of trading using opposite Bristow and ProPetro Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bristow 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 Bristow Group 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.