Correlation Between Mccoy Global and Ranger Energy

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

By analyzing existing cross correlation between Mccoy Global and Ranger Energy Services, you can compare the effects of market volatilities on Mccoy Global and Ranger 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 Mccoy Global with a short position of Ranger Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mccoy Global and Ranger Energy.

Diversification Opportunities for Mccoy Global and Ranger Energy

0.37

Correlation Coefficient

Mccoy Global  Ranger Energy

Weak diversification

The 3 months correlation between Mccoy and Ranger is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Mccoy Global and Ranger Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ranger Energy Services and Mccoy Global 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 Mccoy Global are associated (or correlated) with Ranger Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ranger Energy Services has no effect on the direction of Mccoy Global i.e., Mccoy Global and Ranger Energy go up and down completely randomly.

Pair Corralation between Mccoy Global and Ranger Energy

Assuming the 90 days horizon Mccoy Global is expected to generate 2.16 times more return on investment than Ranger Energy. However, Mccoy Global is 2.16 times more volatile than Ranger Energy Services. It trades about 0.16 of its potential returns per unit of risk. Ranger Energy Services is currently generating about 0.34 per unit of risk. If you would invest  147.00  in Mccoy Global on September 5, 2024 and sell it today you would earn a total of  60.00  from holding Mccoy Global or generate 40.82% return on investment over 90 days.

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

Mccoy Global  vs.  Ranger Energy Services

Mccoy Global

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mccoy Global are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, Mccoy Global reported solid returns over the last few months and may actually be approaching a breakup point.

Ranger Energy Services

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Ranger Energy Services are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Ranger Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mccoy Global and Ranger Energy

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

The idea behind Mccoy Global and Ranger 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.