Correlation Between CSI Compressco and Forum Energy

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Can any of the company-specific risk be diversified away by investing in both CSI Compressco and Forum 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 CSI Compressco and Forum Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSI Compressco and Forum Energy Technologies, you can compare the effects of market volatilities on CSI Compressco and Forum 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 CSI Compressco with a short position of Forum Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSI Compressco and Forum Energy.

Diversification Opportunities for CSI Compressco and Forum Energy

0.05
  Correlation Coefficient

Significant diversification

The 3 months correlation between CSI Compressco and Forum is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CSI Compressco and Forum Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forum Energy Technologies and CSI Compressco 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 CSI Compressco are associated (or correlated) with Forum Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forum Energy Technologies has no effect on the direction of CSI Compressco i.e., CSI Compressco and Forum Energy go up and down completely randomly.

Pair Corralation between CSI Compressco and Forum Energy

Given the investment horizon of 90 days CSI Compressco is expected to generate 1.44 times more return on investment than Forum Energy. However, CSI Compressco is 1.44 times more volatile than Forum Energy Technologies. It trades about -0.11 of its potential returns per unit of risk. Forum Energy Technologies is currently generating about -0.46 per unit of risk. If you would invest  126.00  in CSI Compressco on July 3, 2022 and sell it today you would lose (9.00)  from holding CSI Compressco or give up 7.14% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CSI Compressco  vs.  Forum Energy Technologies

 Performance (%) 
       Timeline  
CSI Compressco 
CSI Compressco Performance
0 of 100
Over the last 90 days CSI Compressco has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm insiders.

CSI Compressco Price Channel

Forum Energy Technologies 
Forum Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Forum Energy Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting technical and fundamental indicators, Forum Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Forum Price Channel

CSI Compressco and Forum Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CSI Compressco and Forum Energy

The main advantage of trading using opposite CSI Compressco and Forum Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSI Compressco position performs unexpectedly, Forum 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 Forum Energy will offset losses from the drop in Forum Energy's long position.
CSI Compressco vs. Amazon Inc
The idea behind CSI Compressco and Forum Energy Technologies 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.
Forum Energy vs. Amazon Inc
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

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