Correlation Between Custom Truck and Precision Drilling
Can any of the company-specific risk be diversified away by investing in both Custom Truck and Precision Drilling 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 Custom Truck and Precision Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Custom Truck One and Precision Drilling, you can compare the effects of market volatilities on Custom Truck and Precision Drilling 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 Custom Truck with a short position of Precision Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Custom Truck and Precision Drilling.
Diversification Opportunities for Custom Truck and Precision Drilling
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Custom and Precision is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Custom Truck One and Precision Drilling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precision Drilling and Custom Truck 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 Custom Truck One are associated (or correlated) with Precision Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precision Drilling has no effect on the direction of Custom Truck i.e., Custom Truck and Precision Drilling go up and down completely randomly.
Pair Corralation between Custom Truck and Precision Drilling
Given the investment horizon of 90 days Custom Truck One is expected to generate 1.18 times more return on investment than Precision Drilling. However, Custom Truck is 1.18 times more volatile than Precision Drilling. It trades about 0.23 of its potential returns per unit of risk. Precision Drilling is currently generating about 0.13 per unit of risk. If you would invest 384.00 in Custom Truck One on April 22, 2025 and sell it today you would earn a total of 174.00 from holding Custom Truck One or generate 45.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Custom Truck One vs. Precision Drilling
Performance |
| Timeline |
| Custom Truck One |
| Precision Drilling |
Custom Truck and Precision Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Custom Truck and Precision Drilling
The main advantage of trading using opposite Custom Truck and Precision Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Custom Truck position performs unexpectedly, Precision Drilling 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 Precision Drilling will offset losses from the drop in Precision Drilling's long position.| Custom Truck vs. Alta Equipment Group | Custom Truck vs. McGrath RentCorp | Custom Truck vs. GATX Corporation | Custom Truck vs. Mega Matrix Corp |
| Precision Drilling vs. Patterson UTI Energy | Precision Drilling vs. Nabors Industries | Precision Drilling vs. Helmerich and Payne | Precision Drilling vs. Noble plc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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