Correlation Between RPC and Ranger Energy

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

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

Diversification Opportunities for RPC and Ranger Energy

-0.2

Correlation Coefficient

RPC  Ranger Energy

Good diversification

The 3 months correlation between RPC and Ranger is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding RPC Inc 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 RPC 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 RPC Inc 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 RPC i.e., RPC and Ranger Energy go up and down completely randomly.

Pair Corralation between RPC and Ranger Energy

Considering the 90-day investment horizon RPC is expected to generate 11.84 times less return on investment than Ranger Energy. In addition to that, RPC is 1.28 times more volatile than Ranger Energy Services. It trades about 0.01 of its total potential returns per unit of risk. Ranger Energy Services is currently generating about 0.18 per unit of volatility. If you would invest  994.00  in Ranger Energy Services on August 30, 2024 and sell it today you would earn a total of  656.00  from holding Ranger Energy Services or generate 66.0% return on investment over 90 days.

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

RPC Inc  vs.  Ranger Energy Services

RPC Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in RPC Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, RPC is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Ranger Energy Services

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ranger Energy Services are ranked lower than 20 (%) 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 RPC and Ranger Energy

The main advantage of trading using opposite RPC and Ranger Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RPC 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 RPC Inc 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.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.