Correlation Between Oceaneering International and ProFrac Holding

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

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

Diversification Opportunities for Oceaneering International and ProFrac Holding

0.75

Correlation Coefficient

Oceaneering International  ProFrac Holding

Poor diversification

The 3 months correlation between Oceaneering and ProFrac is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Oceaneering International 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 Oceaneering International 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 Oceaneering International 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 Oceaneering International i.e., Oceaneering International and ProFrac Holding go up and down completely randomly.

Pair Corralation between Oceaneering International and ProFrac Holding

Considering the 90-day investment horizon Oceaneering International is expected to generate 3.06 times less return on investment than ProFrac Holding. But when comparing it to its historical volatility, Oceaneering International is 2.4 times less risky than ProFrac Holding. It trades about 0.16 of its potential returns per unit of risk. ProFrac Holding Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  459.00  in ProFrac Holding Corp on May 1, 2025 and sell it today you would earn a total of  357.00  from holding ProFrac Holding Corp or generate 77.78% return on investment over 90 days.

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

Oceaneering International  vs.  ProFrac Holding Corp

Oceaneering International

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Oceaneering International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, Oceaneering International demonstrated solid returns over the last few months and may actually be approaching a breakup point.

ProFrac Holding Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ProFrac Holding Corp are ranked lower than 15 (%) 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 Oceaneering International and ProFrac Holding

The main advantage of trading using opposite Oceaneering International and ProFrac Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oceaneering International 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 Oceaneering International 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.