Correlation Between Calfrac Well and EnCore Energy
Can any of the company-specific risk be diversified away by investing in both Calfrac Well and EnCore 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 Calfrac Well and EnCore Energy 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 enCore Energy Corp, you can compare the effects of market volatilities on Calfrac Well and EnCore 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 Calfrac Well with a short position of EnCore Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calfrac Well and EnCore Energy.
Diversification Opportunities for Calfrac Well and EnCore Energy
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Calfrac and EnCore is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Calfrac Well Services and enCore Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enCore Energy Corp 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 EnCore Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enCore Energy Corp has no effect on the direction of Calfrac Well i.e., Calfrac Well and EnCore Energy go up and down completely randomly.
Pair Corralation between Calfrac Well and EnCore Energy
Assuming the 90 days trading horizon Calfrac Well is expected to generate 12.25 times less return on investment than EnCore Energy. But when comparing it to its historical volatility, Calfrac Well Services is 1.5 times less risky than EnCore Energy. It trades about 0.01 of its potential returns per unit of risk. enCore Energy Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 289.00 in enCore Energy Corp on August 24, 2024 and sell it today you would earn a total of 251.00 from holding enCore Energy Corp or generate 86.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calfrac Well Services vs. enCore Energy Corp
Performance |
| Timeline |
| Calfrac Well Services |
| enCore Energy Corp |
Calfrac Well and EnCore Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calfrac Well and EnCore Energy
The main advantage of trading using opposite Calfrac Well and EnCore Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calfrac Well position performs unexpectedly, EnCore 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 EnCore Energy will offset losses from the drop in EnCore Energy'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 |
| EnCore Energy vs. Trican Well Service | EnCore Energy vs. Ensign Energy Services | EnCore Energy vs. Calfrac Well Services | EnCore Energy vs. Birchcliff Energy |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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