Correlation Between Select Energy and ChampionX
Can any of the company-specific risk be diversified away by investing in both Select Energy and ChampionX 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 Select Energy and ChampionX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Select Energy Services and ChampionX, you can compare the effects of market volatilities on Select Energy and ChampionX 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 Select Energy with a short position of ChampionX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Select Energy and ChampionX.
Diversification Opportunities for Select Energy and ChampionX
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Select and ChampionX is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Select Energy Services and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX and Select Energy 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 Select Energy Services are associated (or correlated) with ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of Select Energy i.e., Select Energy and ChampionX go up and down completely randomly.
Pair Corralation between Select Energy and ChampionX
Given the investment horizon of 90 days Select Energy Services is expected to under-perform the ChampionX. In addition to that, Select Energy is 1.18 times more volatile than ChampionX. It trades about -0.15 of its total potential returns per unit of risk. ChampionX is currently generating about -0.03 per unit of volatility. If you would invest 2,997 in ChampionX on December 4, 2024 and sell it today you would lose (153.00) from holding ChampionX or give up 5.11% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Select Energy Services vs. ChampionX
Performance |
Timeline |
Select Energy Services |
ChampionX |
Select Energy and ChampionX Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Select Energy and ChampionX
The main advantage of trading using opposite Select Energy and ChampionX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Select Energy position performs unexpectedly, ChampionX 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 ChampionX will offset losses from the drop in ChampionX's long position.Select Energy vs. Orion Engineered Carbons | Select Energy vs. Element Solutions | Select Energy vs. Kronos Worldwide | Select Energy vs. FutureFuel Corp |
ChampionX vs. Expro Group Holdings | ChampionX vs. Ranger Energy Services | ChampionX vs. Cactus Inc | ChampionX vs. MRC Global |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |