Correlation Between RPC and Ranger Energy
Can any of the company-specific risk be diversified away by investing in both RPC and Ranger 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 RPC and Ranger Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RPC Inc and Ranger Energy Services, you can compare the effects of market volatilities on RPC and Ranger 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 RPC with a short position of Ranger Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of RPC and Ranger Energy.
Diversification Opportunities for RPC and Ranger Energy
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between RPC and Ranger is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding RPC Inc and Ranger Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ranger Energy Services and RPC 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 RPC Inc are associated (or correlated) with Ranger Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ranger Energy Services has no effect on the direction of RPC i.e., RPC and Ranger Energy go up and down completely randomly.
Pair Corralation between RPC and Ranger Energy
Considering the 90-day investment horizon RPC Inc is expected to generate 1.0 times more return on investment than Ranger Energy. However, RPC is 1.0 times more volatile than Ranger Energy Services. It trades about -0.01 of its potential returns per unit of risk. Ranger Energy Services is currently generating about -0.04 per unit of risk. If you would invest 550.00 in RPC Inc on March 24, 2025 and sell it today you would lose (36.00) from holding RPC Inc or give up 6.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RPC Inc vs. Ranger Energy Services
Performance |
| Timeline |
| RPC Inc |
| Ranger Energy Services |
RPC and Ranger Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RPC and Ranger Energy
The main advantage of trading using opposite RPC and Ranger Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RPC position performs unexpectedly, Ranger 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 Ranger Energy will offset losses from the drop in Ranger Energy's long position.The idea behind RPC Inc and Ranger Energy Services 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.| Ranger Energy vs. ProPetro Holding Corp | Ranger Energy vs. RPC Inc | Ranger Energy vs. MRC Global | Ranger Energy vs. Oil States International |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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