Correlation Between Nine Energy and Pacer Export

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

By analyzing existing cross correlation between Nine Energy Service and Pacer Export Leaders, you can compare the effects of market volatilities on Nine Energy and Pacer Export 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 Nine Energy with a short position of Pacer Export. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Energy and Pacer Export.

Diversification Opportunities for Nine Energy and Pacer Export

0.0

Correlation Coefficient

Nine Energy  Pacer Export

Pay attention - limited upside

The 3 months correlation between Nine and Pacer is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nine Energy Service and Pacer Export Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacer Export Leaders and Nine 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 Nine Energy Service are associated (or correlated) with Pacer Export. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacer Export Leaders has no effect on the direction of Nine Energy i.e., Nine Energy and Pacer Export go up and down completely randomly.

Pair Corralation between Nine Energy and Pacer Export

If you would invest  108.00  in Nine Energy Service on September 12, 2024 and sell it today you would earn a total of  16.00  from holding Nine Energy Service or generate 14.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Nine Energy Service  vs.  Pacer Export Leaders

Nine Energy Service

Risk-Adjusted Performance

5 of 100

Insignificant

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

Pacer Export Leaders

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Pacer Export Leaders has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Pacer Export is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Nine Energy and Pacer Export

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

The idea behind Nine Energy Service and Pacer Export Leaders 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.