Correlation Between Tidewater and ProFrac Holding

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

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

Diversification Opportunities for Tidewater and ProFrac Holding

0.64

Correlation Coefficient

Tidewater  ProFrac Holding

Poor diversification

The 3 months correlation between Tidewater and ProFrac is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tidewater 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 Tidewater 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 Tidewater 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 Tidewater i.e., Tidewater and ProFrac Holding go up and down completely randomly.

Pair Corralation between Tidewater and ProFrac Holding

Considering the 90-day investment horizon Tidewater is expected to generate 1.75 times less return on investment than ProFrac Holding. But when comparing it to its historical volatility, Tidewater is 2.01 times less risky than ProFrac Holding. It trades about 0.14 of its potential returns per unit of risk. ProFrac Holding Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  465.00  in ProFrac Holding Corp on May 4, 2025 and sell it today you would earn a total of  186.00  from holding ProFrac Holding Corp or generate 40.0% return on investment over 90 days.

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

Tidewater  vs.  ProFrac Holding Corp

Tidewater

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tidewater are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting fundamental indicators, Tidewater showed solid returns over the last few months and may actually be approaching a breakup point.

ProFrac Holding Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ProFrac Holding Corp are ranked lower than 9 (%) 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 Tidewater and ProFrac Holding

The main advantage of trading using opposite Tidewater and ProFrac Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tidewater 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 Tidewater 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.