Correlation Between Cactus and ProFrac Holding
Can any of the company-specific risk be diversified away by investing in both Cactus 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 Cactus and ProFrac Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cactus Inc and ProFrac Holding Corp, you can compare the effects of market volatilities on Cactus 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 Cactus with a short position of ProFrac Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cactus and ProFrac Holding.
Diversification Opportunities for Cactus and ProFrac Holding
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cactus and ProFrac is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cactus Inc 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 Cactus 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 Cactus Inc 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 Cactus i.e., Cactus and ProFrac Holding go up and down completely randomly.
Pair Corralation between Cactus and ProFrac Holding
Considering the 90-day investment horizon Cactus Inc is expected to generate 0.35 times more return on investment than ProFrac Holding. However, Cactus Inc is 2.86 times less risky than ProFrac Holding. It trades about -0.02 of its potential returns per unit of risk. ProFrac Holding Corp is currently generating about -0.11 per unit of risk. If you would invest 4,434 in Cactus Inc on June 4, 2025 and sell it today you would lose (239.00) from holding Cactus Inc or give up 5.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cactus Inc vs. ProFrac Holding Corp
Performance |
| Timeline |
| Cactus Inc |
| ProFrac Holding Corp |
Cactus and ProFrac Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cactus and ProFrac Holding
The main advantage of trading using opposite Cactus and ProFrac Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cactus 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.| Cactus vs. RPC Inc | Cactus vs. Bristow Group | Cactus vs. Ranger Energy Services | Cactus vs. Select Energy Services |
| 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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