Correlation Between Expro Group and ChampionX

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

By analyzing existing cross correlation between Expro Group Holdings and ChampionX, you can compare the effects of market volatilities on Expro Group and ChampionX 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 Expro Group with a short position of ChampionX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expro Group and ChampionX.

Diversification Opportunities for Expro Group and ChampionX

0.19

Correlation Coefficient

Expro Group  ChampionX

Average diversification

The 3 months correlation between Expro and ChampionX is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Expro Group Holdings and ChampionX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChampionX and Expro Group 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 Expro Group Holdings are associated (or correlated) with ChampionX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChampionX has no effect on the direction of Expro Group i.e., Expro Group and ChampionX go up and down completely randomly.

Pair Corralation between Expro Group and ChampionX

Given the investment horizon of 90 days Expro Group is expected to generate 1.07 times less return on investment than ChampionX. In addition to that, Expro Group is 1.47 times more volatile than ChampionX. It trades about 0.1 of its total potential returns per unit of risk. ChampionX is currently generating about 0.16 per unit of volatility. If you would invest  2,842  in ChampionX on August 30, 2024 and sell it today you would earn a total of  228.00  from holding ChampionX or generate 8.02% return on investment over 90 days.

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

Expro Group Holdings  vs.  ChampionX

Expro Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Expro Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

ChampionX

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChampionX has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical indicators, ChampionX is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Expro Group and ChampionX

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

The idea behind Expro Group Holdings and ChampionX 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.