Correlation Between Expro Group and Core Laboratories

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

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

Diversification Opportunities for Expro Group and Core Laboratories

0.81

Correlation Coefficient

Expro Group  Core Laboratories

Very poor diversification

The 3 months correlation between Expro and Core is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Expro Group Holdings and Core Laboratories NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Core Laboratories and Expro Group 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 Expro Group Holdings are associated (or correlated) with Core Laboratories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Core Laboratories has no effect on the direction of Expro Group i.e., Expro Group and Core Laboratories go up and down completely randomly.

Pair Corralation between Expro Group and Core Laboratories

Given the investment horizon of 90 days Expro Group Holdings is expected to under-perform the Core Laboratories. In addition to that, Expro Group is 1.06 times more volatile than Core Laboratories NV. It trades about -0.04 of its total potential returns per unit of risk. Core Laboratories NV is currently generating about -0.03 per unit of volatility. If you would invest  1,673  in Core Laboratories NV on December 27, 2024 and sell it today you would lose (119.00) from holding Core Laboratories NV or give up 7.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.36%
Values	Daily Returns

Expro Group Holdings  vs.  Core Laboratories NV

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.

Core Laboratories

Risk-Adjusted Performance

Very Weak

Over the last 90 days Core Laboratories NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Core Laboratories is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Expro Group and Core Laboratories

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

The idea behind Expro Group Holdings and Core Laboratories NV 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 Transaction History module to view history of all your transactions and understand their impact on performance.