Correlation Between ProFrac Holding and North American

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

By analyzing existing cross correlation between ProFrac Holding Corp and North American Construction, you can compare the effects of market volatilities on ProFrac Holding and North American 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 ProFrac Holding with a short position of North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProFrac Holding and North American.

Diversification Opportunities for ProFrac Holding and North American

0.72

Correlation Coefficient

ProFrac Holding  North American

Poor diversification

The 3 months correlation between ProFrac and North is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding ProFrac Holding Corp and North American Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American Const and ProFrac Holding 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 ProFrac Holding Corp are associated (or correlated) with North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American Const has no effect on the direction of ProFrac Holding i.e., ProFrac Holding and North American go up and down completely randomly.

Pair Corralation between ProFrac Holding and North American

Given the investment horizon of 90 days ProFrac Holding Corp is expected to generate 2.54 times more return on investment than North American. However, ProFrac Holding is 2.54 times more volatile than North American Construction. It trades about 0.04 of its potential returns per unit of risk. North American Construction is currently generating about 0.03 per unit of risk. If you would invest  388.00  in ProFrac Holding Corp on September 10, 2025 and sell it today you would earn a total of  24.00  from holding ProFrac Holding Corp or generate 6.19% return on investment over 90 days.

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

ProFrac Holding Corp  vs.  North American Construction

ProFrac Holding Corp

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in ProFrac Holding Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental indicators, ProFrac Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

North American Const

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in North American Construction are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, North American is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ProFrac Holding and North American

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

The idea behind ProFrac Holding Corp and North American Construction 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.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.