Correlation Between Archrock and ProPetro Holding
Can any of the company-specific risk be diversified away by investing in both Archrock and ProPetro Holding 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 Archrock and ProPetro Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Archrock and ProPetro Holding Corp, you can compare the effects of market volatilities on Archrock and ProPetro Holding 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 Archrock with a short position of ProPetro Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Archrock and ProPetro Holding.
Diversification Opportunities for Archrock and ProPetro Holding
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Archrock and ProPetro is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Archrock and ProPetro Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProPetro Holding Corp and Archrock 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 Archrock are associated (or correlated) with ProPetro Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProPetro Holding Corp has no effect on the direction of Archrock i.e., Archrock and ProPetro Holding go up and down completely randomly.
Pair Corralation between Archrock and ProPetro Holding
Given the investment horizon of 90 days Archrock is expected to generate 0.58 times more return on investment than ProPetro Holding. However, Archrock is 1.73 times less risky than ProPetro Holding. It trades about 0.04 of its potential returns per unit of risk. ProPetro Holding Corp is currently generating about -0.01 per unit of risk. If you would invest 2,387 in Archrock on March 11, 2025 and sell it today you would earn a total of 130.00 from holding Archrock or generate 5.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.31% |
| Values | Daily Returns |
Archrock vs. ProPetro Holding Corp
Performance |
| Timeline |
| Archrock |
| ProPetro Holding Corp |
Archrock and ProPetro Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Archrock and ProPetro Holding
The main advantage of trading using opposite Archrock and ProPetro Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Archrock position performs unexpectedly, ProPetro Holding 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 ProPetro Holding will offset losses from the drop in ProPetro Holding's long position.| Archrock vs. ProPetro Holding Corp | Archrock vs. Select Energy Services | Archrock vs. USA Compression Partners | Archrock vs. Par Pacific Holdings |
| ProPetro Holding vs. Ranger Energy Services | ProPetro Holding vs. RPC Inc | ProPetro Holding vs. Archrock | ProPetro Holding vs. Bristow Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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