Correlation Between Expro Group and Pardee Resources

Can any of the company-specific risk be diversified away by investing in both Expro Group and Pardee Resources 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 Pardee Resources 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 Pardee Resources Co, you can compare the effects of market volatilities on Expro Group and Pardee Resources 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 Pardee Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expro Group and Pardee Resources.

Diversification Opportunities for Expro Group and Pardee Resources

-0.63

Correlation Coefficient

Expro Group  Pardee Resources

Excellent diversification

The 3 months correlation between Expro and Pardee is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Expro Group Holdings and Pardee Resources Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pardee Resources 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 Pardee Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pardee Resources has no effect on the direction of Expro Group i.e., Expro Group and Pardee Resources go up and down completely randomly.

Pair Corralation between Expro Group and Pardee Resources

Given the investment horizon of 90 days Expro Group Holdings is expected to under-perform the Pardee Resources. In addition to that, Expro Group is 3.01 times more volatile than Pardee Resources Co. It trades about -0.16 of its total potential returns per unit of risk. Pardee Resources Co is currently generating about 0.13 per unit of volatility. If you would invest  30,800  in Pardee Resources Co on September 13, 2024 and sell it today you would earn a total of  2,700  from holding Pardee Resources Co or generate 8.77% return on investment over 90 days.

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

Expro Group Holdings  vs.  Pardee Resources Co

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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pardee Resources

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pardee Resources Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Pardee Resources may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Expro Group and Pardee Resources

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

The idea behind Expro Group Holdings and Pardee Resources Co 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.