Correlation Between Calfrac Well and Secure Energy
Can any of the company-specific risk be diversified away by investing in both Calfrac Well 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 Calfrac Well and Secure 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 Secure Energy Services, you can compare the effects of market volatilities on Calfrac Well 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 Calfrac Well with a short position of Secure Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calfrac Well and Secure Energy.
Diversification Opportunities for Calfrac Well and Secure Energy
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Calfrac and Secure is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Calfrac Well Services 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 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 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 Calfrac Well i.e., Calfrac Well and Secure Energy go up and down completely randomly.
Pair Corralation between Calfrac Well and Secure Energy
Assuming the 90 days trading horizon Calfrac Well Services is expected to generate 0.95 times more return on investment than Secure Energy. However, Calfrac Well Services is 1.06 times less risky than Secure Energy. It trades about -0.09 of its potential returns per unit of risk. Secure Energy Services is currently generating about -0.26 per unit of risk. If you would invest 398.00 in Calfrac Well Services on November 18, 2024 and sell it today you would lose (11.00) from holding Calfrac Well Services or give up 2.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calfrac Well Services vs. Secure Energy Services
Performance |
| Timeline |
| Calfrac Well Services |
| Secure Energy Services |
Calfrac Well and Secure Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calfrac Well and Secure Energy
The main advantage of trading using opposite Calfrac Well and Secure Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calfrac Well 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.| Calfrac Well vs. Trican Well Service | Calfrac Well vs. Ensign Energy Services | Calfrac Well vs. Precision Drilling | Calfrac Well vs. Secure Energy Services |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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