Correlation Between National Energy and Cactus

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

By analyzing existing cross correlation between National Energy Services and Cactus Inc, you can compare the effects of market volatilities on National Energy and Cactus 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 National Energy with a short position of Cactus. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Energy and Cactus.

Diversification Opportunities for National Energy and Cactus

0.16

Correlation Coefficient

National Energy  Cactus

Average diversification

The 3 months correlation between National and Cactus is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding National Energy Services and Cactus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cactus Inc and National Energy 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 National Energy Services are associated (or correlated) with Cactus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cactus Inc has no effect on the direction of National Energy i.e., National Energy and Cactus go up and down completely randomly.

Pair Corralation between National Energy and Cactus

Given the investment horizon of 90 days National Energy Services is expected to generate 1.48 times more return on investment than Cactus. However, National Energy is 1.48 times more volatile than Cactus Inc. It trades about 0.03 of its potential returns per unit of risk. Cactus Inc is currently generating about 0.01 per unit of risk. If you would invest  626.00  in National Energy Services on May 6, 2025 and sell it today you would earn a total of  14.00  from holding National Energy Services or generate 2.24% return on investment over 90 days.

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

National Energy Services  vs.  Cactus Inc

National Energy Services

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in National Energy Services are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, National Energy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Cactus Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cactus Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, Cactus is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with National Energy and Cactus

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

The idea behind National Energy Services and Cactus 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.