Correlation Between CES Energy and Secure Energy
Can any of the company-specific risk be diversified away by investing in both CES Energy and Secure Energy 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 Secure Energy 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 Secure Energy Services, you can compare the effects of market volatilities on CES Energy and Secure Energy 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 Secure Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CES Energy and Secure Energy.
Diversification Opportunities for CES Energy and Secure Energy
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CES and Secure is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding CES Energy Solutions and Secure Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secure Energy Services 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 Secure Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secure Energy Services has no effect on the direction of CES Energy i.e., CES Energy and Secure Energy go up and down completely randomly.
Pair Corralation between CES Energy and Secure Energy
Assuming the 90 days trading horizon CES Energy Solutions is expected to generate 1.44 times more return on investment than Secure Energy. However, CES Energy is 1.44 times more volatile than Secure Energy Services. It trades about 0.15 of its potential returns per unit of risk. Secure Energy Services is currently generating about 0.1 per unit of risk. If you would invest 369.00 in CES Energy Solutions on November 9, 2024 and sell it today you would earn a total of 517.00 from holding CES Energy Solutions or generate 140.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CES Energy Solutions vs. Secure Energy Services
Performance |
| Timeline |
| CES Energy Solutions |
| Secure Energy Services |
CES Energy and Secure Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CES Energy and Secure Energy
The main advantage of trading using opposite CES Energy and Secure Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CES Energy position performs unexpectedly, Secure Energy 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 Secure Energy will offset losses from the drop in Secure Energy'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 |
| Secure Energy vs. CES Energy Solutions | Secure Energy vs. Ensign Energy Services | Secure Energy vs. Enerflex | Secure Energy vs. Pason Systems |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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