Correlation Between Ranger Energy and Select Energy
Can any of the company-specific risk be diversified away by investing in both Ranger Energy and Select 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 Ranger Energy and Select Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ranger Energy Services and Select Energy Services, you can compare the effects of market volatilities on Ranger Energy and Select 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 Ranger Energy with a short position of Select Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ranger Energy and Select Energy.
Diversification Opportunities for Ranger Energy and Select Energy
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ranger and Select is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ranger Energy Services and Select Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Energy Services and Ranger 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 Ranger Energy Services are associated (or correlated) with Select Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Energy Services has no effect on the direction of Ranger Energy i.e., Ranger Energy and Select Energy go up and down completely randomly.
Pair Corralation between Ranger Energy and Select Energy
Given the investment horizon of 90 days Ranger Energy Services is expected to generate 1.21 times more return on investment than Select Energy. However, Ranger Energy is 1.21 times more volatile than Select Energy Services. It trades about 0.17 of its potential returns per unit of risk. Select Energy Services is currently generating about 0.04 per unit of risk. If you would invest 1,060 in Ranger Energy Services on May 30, 2025 and sell it today you would earn a total of 353.00 from holding Ranger Energy Services or generate 33.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ranger Energy Services vs. Select Energy Services
Performance |
| Timeline |
| Ranger Energy Services |
| Select Energy Services |
Ranger Energy and Select Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ranger Energy and Select Energy
The main advantage of trading using opposite Ranger Energy and Select Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ranger Energy position performs unexpectedly, Select 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 Select Energy will offset losses from the drop in Select Energy's long position.| Ranger Energy vs. Archrock | Ranger Energy vs. Solaris Energy Infrastructure, | Ranger Energy vs. NPK International | Ranger Energy vs. Bristow Group |
| Select Energy vs. Orion Engineered Carbons | Select Energy vs. Element Solutions | Select Energy vs. Kronos Worldwide | Select Energy vs. FutureFuel Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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