Correlation Between Expro Group and Select Energy

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

Diversification Opportunities for Expro Group and Select Energy

0.93

Correlation Coefficient

Expro Group  Select Energy

Almost no diversification

The 3 months correlation between Expro and Select is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Expro Group Holdings and Select Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Energy Services 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 Select Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Energy Services has no effect on the direction of Expro Group i.e., Expro Group and Select Energy go up and down completely randomly.

Pair Corralation between Expro Group and Select Energy

Given the investment horizon of 90 days Expro Group Holdings is expected to generate 1.15 times more return on investment than Select Energy. However, Expro Group is 1.15 times more volatile than Select Energy Services. It trades about -0.08 of its potential returns per unit of risk. Select Energy Services is currently generating about -0.13 per unit of risk. If you would invest  1,206  in Expro Group Holdings on December 28, 2024 and sell it today you would lose (196.00) from holding Expro Group Holdings or give up 16.25% of portfolio value over 90 days.

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

Expro Group Holdings  vs.  Select Energy Services

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

Select Energy Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Select Energy Services has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic 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 Expro Group and Select Energy

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

The idea behind Expro Group Holdings and Select Energy Services 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.