Correlation Between Cactus and Expro Group

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

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

Diversification Opportunities for Cactus and Expro Group

0.93

Correlation Coefficient

Cactus  Expro Group

Almost no diversification

The 3 months correlation between Cactus and Expro is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Cactus Inc 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 Cactus 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 Cactus Inc 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 Cactus i.e., Cactus and Expro Group go up and down completely randomly.

Pair Corralation between Cactus and Expro Group

Considering the 90-day investment horizon Cactus Inc is expected to under-perform the Expro Group. But the stock apears to be less risky and, when comparing its historical volatility, Cactus Inc is 1.36 times less risky than Expro Group. The stock trades about -0.15 of its potential returns per unit of risk. The Expro Group Holdings is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  1,206  in Expro Group Holdings on December 28, 2024 and sell it today you would lose (152.00) from holding Expro Group Holdings or give up 12.6% of portfolio value over 90 days.

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

Cactus Inc  vs.  Expro Group Holdings

Cactus Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cactus Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Expro Group Holdings

Risk-Adjusted Performance

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 latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Cactus and Expro Group

The main advantage of trading using opposite Cactus and Expro Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cactus 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 Cactus Inc 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.