Correlation Between CES Energy and Kelt Exploration
Can any of the company-specific risk be diversified away by investing in both CES Energy and Kelt Exploration 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 CES Energy and Kelt Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CES Energy Solutions and Kelt Exploration, you can compare the effects of market volatilities on CES Energy and Kelt Exploration 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 CES Energy with a short position of Kelt Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of CES Energy and Kelt Exploration.
Diversification Opportunities for CES Energy and Kelt Exploration
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CES and Kelt is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding CES Energy Solutions and Kelt Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelt Exploration and CES 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 CES Energy Solutions are associated (or correlated) with Kelt Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelt Exploration has no effect on the direction of CES Energy i.e., CES Energy and Kelt Exploration go up and down completely randomly.
Pair Corralation between CES Energy and Kelt Exploration
Assuming the 90 days trading horizon CES Energy Solutions is expected to generate 1.43 times more return on investment than Kelt Exploration. However, CES Energy is 1.43 times more volatile than Kelt Exploration. It trades about 0.35 of its potential returns per unit of risk. Kelt Exploration is currently generating about 0.09 per unit of risk. If you would invest 759.00 in CES Energy Solutions on August 29, 2024 and sell it today you would earn a total of 187.00 from holding CES Energy Solutions or generate 24.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CES Energy Solutions vs. Kelt Exploration
Performance |
| Timeline |
| CES Energy Solutions |
| Kelt Exploration |
CES Energy and Kelt Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CES Energy and Kelt Exploration
The main advantage of trading using opposite CES Energy and Kelt Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CES Energy position performs unexpectedly, Kelt Exploration 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 Kelt Exploration will offset losses from the drop in Kelt Exploration's long position.| CES Energy vs. Secure Energy Services | CES Energy vs. Ensign Energy Services | CES Energy vs. Kelt Exploration | CES Energy vs. Trican Well Service |
| Kelt Exploration vs. Yangarra Resources | Kelt Exploration vs. iShares Canadian HYBrid | Kelt Exploration vs. Altagas Cum Red | Kelt Exploration vs. European Residential Real |
Check out your portfolio center.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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |