Correlation Between Calfrac Well and Black Diamond
Can any of the company-specific risk be diversified away by investing in both Calfrac Well and Black Diamond 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 Calfrac Well and Black Diamond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calfrac Well Services and Black Diamond Group, you can compare the effects of market volatilities on Calfrac Well and Black Diamond 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 Calfrac Well with a short position of Black Diamond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calfrac Well and Black Diamond.
Diversification Opportunities for Calfrac Well and Black Diamond
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Calfrac and Black is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Calfrac Well Services and Black Diamond Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Diamond Group and Calfrac Well 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 Calfrac Well Services are associated (or correlated) with Black Diamond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Diamond Group has no effect on the direction of Calfrac Well i.e., Calfrac Well and Black Diamond go up and down completely randomly.
Pair Corralation between Calfrac Well and Black Diamond
Assuming the 90 days trading horizon Calfrac Well Services is expected to generate 1.39 times more return on investment than Black Diamond. However, Calfrac Well is 1.39 times more volatile than Black Diamond Group. It trades about -0.01 of its potential returns per unit of risk. Black Diamond Group is currently generating about -0.12 per unit of risk. If you would invest 380.00 in Calfrac Well Services on November 3, 2024 and sell it today you would lose (2.00) from holding Calfrac Well Services or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calfrac Well Services vs. Black Diamond Group
Performance |
| Timeline |
| Calfrac Well Services |
| Black Diamond Group |
Calfrac Well and Black Diamond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calfrac Well and Black Diamond
The main advantage of trading using opposite Calfrac Well and Black Diamond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calfrac Well position performs unexpectedly, Black Diamond 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 Black Diamond will offset losses from the drop in Black Diamond's long position.| Calfrac Well vs. Trican Well Service | Calfrac Well vs. Ensign Energy Services | Calfrac Well vs. Precision Drilling | Calfrac Well vs. Secure Energy Services |
| Black Diamond vs. CES Energy Solutions | Black Diamond vs. Calfrac Well Services | Black Diamond vs. Secure Energy Services | Black Diamond vs. Bird Construction |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |