Correlation Between Ranger Energy and Bristow

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

Diversification Opportunities for Ranger Energy and Bristow

-0.22

Correlation Coefficient

Ranger Energy  Bristow

Very good diversification

The 3 months correlation between Ranger and Bristow is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Ranger Energy Services and Bristow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bristow Group 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 Bristow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bristow Group has no effect on the direction of Ranger Energy i.e., Ranger Energy and Bristow go up and down completely randomly.

Pair Corralation between Ranger Energy and Bristow

Given the investment horizon of 90 days Ranger Energy Services is expected to under-perform the Bristow. But the stock apears to be less risky and, when comparing its historical volatility, Ranger Energy Services is 1.36 times less risky than Bristow. The stock trades about -0.54 of its potential returns per unit of risk. The Bristow Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  2,709  in Bristow Group on February 5, 2024 and sell it today you would earn a total of  61.00  from holding Bristow Group or generate 2.25% return on investment over 90 days.

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

Ranger Energy Services  vs.  Bristow Group

Ranger Energy Services

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ranger Energy Services are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Ranger Energy is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Bristow Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Bristow Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Bristow may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Ranger Energy and Bristow

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

The idea behind Ranger Energy Services and Bristow Group 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..