Correlation Between Flotek Industries and ALPHA TECHNOLOGIES

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

Diversification Opportunities for Flotek Industries and ALPHA TECHNOLOGIES

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Flotek and ALPHA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Flotek Industries and ALPHA TECHNOLOGIES GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALPHA TECHNOLOGIES and Flotek Industries 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 Flotek Industries are associated (or correlated) with ALPHA TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALPHA TECHNOLOGIES has no effect on the direction of Flotek Industries i.e., Flotek Industries and ALPHA TECHNOLOGIES go up and down completely randomly.

Pair Corralation between Flotek Industries and ALPHA TECHNOLOGIES

Considering the 90-day investment horizon Flotek Industries is expected to generate 1.24 times more return on investment than ALPHA TECHNOLOGIES. However, Flotek Industries is 1.24 times more volatile than ALPHA TECHNOLOGIES GROUP. It trades about 0.02 of its potential returns per unit of risk. ALPHA TECHNOLOGIES GROUP is currently generating about -0.06 per unit of risk. If you would invest  126.00  in Flotek Industries on July 1, 2022 and sell it today you would lose (27.00)  from holding Flotek Industries or give up 21.43% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy97.6%
ValuesDaily Returns

Flotek Industries  vs.  ALPHA TECHNOLOGIES GROUP INC

 Performance (%) 
       Timeline  
Flotek Industries 
Flotek Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Flotek Industries are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Flotek Industries is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Flotek Price Channel

ALPHA TECHNOLOGIES 
ALPHA Performance
0 of 100
Over the last 90 days ALPHA TECHNOLOGIES GROUP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ALPHA TECHNOLOGIES is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Flotek Industries and ALPHA TECHNOLOGIES Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Flotek Industries and ALPHA TECHNOLOGIES

The main advantage of trading using opposite Flotek Industries and ALPHA TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flotek Industries position performs unexpectedly, ALPHA TECHNOLOGIES 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 ALPHA TECHNOLOGIES will offset losses from the drop in ALPHA TECHNOLOGIES's long position.
Flotek Industries vs. Amazon Inc
The idea behind Flotek Industries and ALPHA TECHNOLOGIES GROUP 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.
ALPHA TECHNOLOGIES vs. Caterpillar
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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