Correlation Between CSI Compressco and Forum Energy

Can any of the company-specific risk be diversified away by investing in both CSI Compressco and Forum 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 CSI Compressco and Forum Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CSI Compressco LP and Forum Energy Technologies, you can compare the effects of market volatilities on CSI Compressco and Forum 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 CSI Compressco with a short position of Forum Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSI Compressco and Forum Energy.

Diversification Opportunities for CSI Compressco and Forum Energy

-0.18

Correlation Coefficient

CSI Compressco  Forum Energy

Good diversification

The 3 months correlation between CSI and Forum is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding CSI Compressco LP and Forum Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forum Energy Technologies and CSI Compressco 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 CSI Compressco LP are associated (or correlated) with Forum Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forum Energy Technologies has no effect on the direction of CSI Compressco i.e., CSI Compressco and Forum Energy go up and down completely randomly.

Pair Corralation between CSI Compressco and Forum Energy

If you would invest  111.00  in CSI Compressco LP on September 5, 2024 and sell it today you would earn a total of  0.00  from holding CSI Compressco LP or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

CSI Compressco LP  vs.  Forum Energy Technologies

CSI Compressco LP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSI Compressco LP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, CSI Compressco is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Forum Energy Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forum Energy Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Forum Energy is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with CSI Compressco and Forum Energy

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

The idea behind CSI Compressco LP and Forum Energy Technologies 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.