Correlation Between Precision Drilling and National Energy
Can any of the company-specific risk be diversified away by investing in both Precision Drilling and National Energy 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 Precision Drilling and National Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precision Drilling and National Energy Services, you can compare the effects of market volatilities on Precision Drilling and National Energy 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 Precision Drilling with a short position of National Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision Drilling and National Energy.
Diversification Opportunities for Precision Drilling and National Energy
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Precision and National is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Precision Drilling and National Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Energy Services and Precision Drilling 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 Precision Drilling are associated (or correlated) with National Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Energy Services has no effect on the direction of Precision Drilling i.e., Precision Drilling and National Energy go up and down completely randomly.
Pair Corralation between Precision Drilling and National Energy
Considering the 90-day investment horizon Precision Drilling is expected to generate 8.04 times less return on investment than National Energy. But when comparing it to its historical volatility, Precision Drilling is 1.76 times less risky than National Energy. It trades about 0.07 of its potential returns per unit of risk. National Energy Services is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 720.00 in National Energy Services on August 17, 2025 and sell it today you would earn a total of 655.00 from holding National Energy Services or generate 90.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precision Drilling vs. National Energy Services
Performance |
| Timeline |
| Precision Drilling |
| National Energy Services |
Precision Drilling and National Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precision Drilling and National Energy
The main advantage of trading using opposite Precision Drilling and National Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision Drilling position performs unexpectedly, National Energy 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 National Energy will offset losses from the drop in National Energy's long position.| Precision Drilling vs. Borr Drilling | Precision Drilling vs. Nabors Industries | Precision Drilling vs. Vitesse Energy | Precision Drilling vs. Teekay |
| National Energy vs. RPC Inc | National Energy vs. Bristow Group | National Energy vs. Innovex International, | National Energy vs. Flowco Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| AI Portfolio Prophet Use AI to generate optimal portfolios and find profitable investment opportunities |