Correlation Between KLX Energy and ProFrac Holding
Can any of the company-specific risk be diversified away by investing in both KLX Energy and ProFrac 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 KLX Energy and ProFrac Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KLX Energy Services and ProFrac Holding Corp, you can compare the effects of market volatilities on KLX Energy and ProFrac 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 KLX Energy with a short position of ProFrac Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of KLX Energy and ProFrac Holding.
Diversification Opportunities for KLX Energy and ProFrac Holding
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between KLX and ProFrac is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding KLX Energy Services and ProFrac Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProFrac Holding Corp and KLX Energy 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 KLX Energy Services are associated (or correlated) with ProFrac Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProFrac Holding Corp has no effect on the direction of KLX Energy i.e., KLX Energy and ProFrac Holding go up and down completely randomly.
Pair Corralation between KLX Energy and ProFrac Holding
Given the investment horizon of 90 days KLX Energy Services is expected to generate 1.52 times more return on investment than ProFrac Holding. However, KLX Energy is 1.52 times more volatile than ProFrac Holding Corp. It trades about 0.06 of its potential returns per unit of risk. ProFrac Holding Corp is currently generating about -0.02 per unit of risk. If you would invest 174.00 in KLX Energy Services on May 1, 2025 and sell it today you would earn a total of 15.00 from holding KLX Energy Services or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KLX Energy Services vs. ProFrac Holding Corp
Performance |
| Timeline |
| KLX Energy Services |
| ProFrac Holding Corp |
KLX Energy and ProFrac Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KLX Energy and ProFrac Holding
The main advantage of trading using opposite KLX Energy and ProFrac Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KLX Energy position performs unexpectedly, ProFrac 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 ProFrac Holding will offset losses from the drop in ProFrac Holding's long position.| KLX Energy vs. Nine Energy Service | KLX Energy vs. Liberty Oilfield Services | KLX Energy vs. ProFrac Holding Corp | KLX Energy vs. Helix Energy Solutions |
| ProFrac Holding vs. Flotek Industries | ProFrac Holding vs. ProPetro Holding Corp | ProFrac Holding vs. Liberty Oilfield Services | ProFrac Holding vs. KLX Energy Services |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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