Correlation Between PPJ Healthcare and Nextier Oilfield

Can any of the company-specific risk be diversified away by investing in both PPJ Healthcare and Nextier Oilfield 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 PPJ Healthcare and Nextier Oilfield into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between PPJ Healthcare Enterprises and Nextier Oilfield Solutions, you can compare the effects of market volatilities on PPJ Healthcare and Nextier Oilfield 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 PPJ Healthcare with a short position of Nextier Oilfield. Check out your portfolio center. Please also check ongoing floating volatility patterns of PPJ Healthcare and Nextier Oilfield.

Diversification Opportunities for PPJ Healthcare and Nextier Oilfield

0.02

Correlation Coefficient

PPJ Healthcare  Nextier Oilfield

Significant diversification

The 3 months correlation between PPJ and Nextier is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding PPJ Healthcare Enterprises and Nextier Oilfield Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextier Oilfield Sol and PPJ Healthcare 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 PPJ Healthcare Enterprises are associated (or correlated) with Nextier Oilfield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextier Oilfield Sol has no effect on the direction of PPJ Healthcare i.e., PPJ Healthcare and Nextier Oilfield go up and down completely randomly.

Pair Corralation between PPJ Healthcare and Nextier Oilfield

If you would invest  0.03  in PPJ Healthcare Enterprises on January 20, 2024 and sell it today you would earn a total of  0.00  from holding PPJ Healthcare Enterprises or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

PPJ Healthcare Enterprises  vs.  Nextier Oilfield Solutions

PPJ Healthcare Enter

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PPJ Healthcare Enterprises are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady forward-looking indicators, PPJ Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nextier Oilfield Sol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nextier Oilfield Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Nextier Oilfield is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with PPJ Healthcare and Nextier Oilfield

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

The idea behind PPJ Healthcare Enterprises and Nextier Oilfield Solutions 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.