Correlation Between Flotek Industries and ProFrac Holding

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

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

Diversification Opportunities for Flotek Industries and ProFrac Holding

0.53

Correlation Coefficient

Flotek Industries  ProFrac Holding

Very weak diversification

The 3 months correlation between Flotek and ProFrac is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Flotek Industries and ProFrac Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProFrac Holding Corp 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 ProFrac Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProFrac Holding Corp has no effect on the direction of Flotek Industries i.e., Flotek Industries and ProFrac Holding go up and down completely randomly.

Pair Corralation between Flotek Industries and ProFrac Holding

Considering the 90-day investment horizon Flotek Industries is expected to generate 14.43 times less return on investment than ProFrac Holding. But when comparing it to its historical volatility, Flotek Industries is 1.56 times less risky than ProFrac Holding. It trades about 0.01 of its potential returns per unit of risk. ProFrac Holding Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  569.00  in ProFrac Holding Corp on May 13, 2025 and sell it today you would earn a total of  62.00  from holding ProFrac Holding Corp or generate 10.9% return on investment over 90 days.

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

Flotek Industries  vs.  ProFrac Holding Corp

Flotek Industries

Risk-Adjusted Performance

Weakest

Over the last 90 days Flotek Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Flotek Industries is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting fundamental indicators, ProFrac Holding exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Flotek Industries and ProFrac Holding

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

The idea behind Flotek Industries and ProFrac Holding Corp 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.