Correlation Between Flotek Industries and SOI Old

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

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

Diversification Opportunities for Flotek Industries and SOI Old

0.0

Correlation Coefficient

Flotek Industries  SOI Old

Pay attention - limited upside

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

Pair Corralation between Flotek Industries and SOI Old

If you would invest  376.00  in Flotek Industries on February 3, 2025 and sell it today you would earn a total of  352.00  from holding Flotek Industries or generate 93.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Flotek Industries  vs.  SOI Old

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 latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

SOI Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days SOI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, SOI Old is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Flotek Industries and SOI Old

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

The idea behind Flotek Industries and SOI Old 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.