Correlation Between Flotek Industries and RPC

Can any of the company-specific risk be diversified away by investing in both Flotek Industries and RPC 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 RPC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Flotek Industries and RPC Inc, you can compare the effects of market volatilities on Flotek Industries and RPC 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 RPC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flotek Industries and RPC.

Diversification Opportunities for Flotek Industries and RPC

0.77

Correlation Coefficient

Flotek Industries  RPC

Poor diversification

The 3 months correlation between Flotek and RPC is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Flotek Industries and RPC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPC Inc 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 RPC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPC Inc has no effect on the direction of Flotek Industries i.e., Flotek Industries and RPC go up and down completely randomly.

Pair Corralation between Flotek Industries and RPC

Considering the 90-day investment horizon Flotek Industries is expected to generate 1.31 times more return on investment than RPC. However, Flotek Industries is 1.31 times more volatile than RPC Inc. It trades about -0.05 of its potential returns per unit of risk. RPC Inc is currently generating about -0.09 per unit of risk. If you would invest  900.00  in Flotek Industries on February 5, 2025 and sell it today you would lose (172.00) from holding Flotek Industries or give up 19.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Flotek Industries  vs.  RPC Inc

Flotek Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flotek Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in June 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

RPC Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days RPC Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in June 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Flotek Industries and RPC

The main advantage of trading using opposite Flotek Industries and RPC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flotek Industries position performs unexpectedly, RPC 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 RPC will offset losses from the drop in RPC's long position.

The idea behind Flotek Industries and RPC Inc 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.