Correlation Between Expro Group and Oceaneering International

Can any of the company-specific risk be diversified away by investing in both Expro Group and Oceaneering International 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 Oceaneering International 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 Oceaneering International, you can compare the effects of market volatilities on Expro Group and Oceaneering International 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 Oceaneering International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expro Group and Oceaneering International.

Diversification Opportunities for Expro Group and Oceaneering International

-0.11

Correlation Coefficient

Expro Group  Oceaneering International

Good diversification

The 3 months correlation between Expro and Oceaneering is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Expro Group Holdings and Oceaneering International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceaneering International 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 Oceaneering International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceaneering International has no effect on the direction of Expro Group i.e., Expro Group and Oceaneering International go up and down completely randomly.

Pair Corralation between Expro Group and Oceaneering International

Given the investment horizon of 90 days Expro Group Holdings is expected to under-perform the Oceaneering International. In addition to that, Expro Group is 1.01 times more volatile than Oceaneering International. It trades about -0.01 of its total potential returns per unit of risk. Oceaneering International is currently generating about 0.06 per unit of volatility. If you would invest  1,937  in Oceaneering International on October 3, 2024 and sell it today you would earn a total of  671.00  from holding Oceaneering International or generate 34.64% return on investment over 90 days.

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

Expro Group Holdings  vs.  Oceaneering International

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 weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Oceaneering International

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Oceaneering International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Oceaneering International is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Expro Group and Oceaneering International

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

The idea behind Expro Group Holdings and Oceaneering International 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.