Correlation Between Ranger Energy and Schlumberger
Can any of the company-specific risk be diversified away by investing in both Ranger Energy and Schlumberger 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 Ranger Energy and Schlumberger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ranger Energy Services and Schlumberger NV, you can compare the effects of market volatilities on Ranger Energy and Schlumberger 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 Ranger Energy with a short position of Schlumberger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ranger Energy and Schlumberger.
Diversification Opportunities for Ranger Energy and Schlumberger
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ranger and Schlumberger is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ranger Energy Services and Schlumberger NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schlumberger NV and Ranger 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 Ranger Energy Services are associated (or correlated) with Schlumberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schlumberger NV has no effect on the direction of Ranger Energy i.e., Ranger Energy and Schlumberger go up and down completely randomly.
Pair Corralation between Ranger Energy and Schlumberger
Given the investment horizon of 90 days Ranger Energy Services is expected to generate 1.79 times more return on investment than Schlumberger. However, Ranger Energy is 1.79 times more volatile than Schlumberger NV. It trades about 0.03 of its potential returns per unit of risk. Schlumberger NV is currently generating about -0.06 per unit of risk. If you would invest 1,016 in Ranger Energy Services on February 23, 2024 and sell it today you would earn a total of 34.00 from holding Ranger Energy Services or generate 3.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ranger Energy Services vs. Schlumberger NV
Performance |
Timeline |
Ranger Energy Services |
Schlumberger NV |
Ranger Energy and Schlumberger Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ranger Energy and Schlumberger
The main advantage of trading using opposite Ranger Energy and Schlumberger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ranger Energy position performs unexpectedly, Schlumberger 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 Schlumberger will offset losses from the drop in Schlumberger's long position.Ranger Energy vs. NXT Energy Solutions | Ranger Energy vs. Mccoy Global | Ranger Energy vs. MRC Global | Ranger Energy vs. Bri Chem Corp |
Schlumberger vs. NXT Energy Solutions | Schlumberger vs. Mccoy Global | Schlumberger vs. Ranger Energy Services | Schlumberger 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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