Correlation Between Calfrac Well and Total Energy
Can any of the company-specific risk be diversified away by investing in both Calfrac Well and Total 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 Total 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 Total Energy Services, you can compare the effects of market volatilities on Calfrac Well and Total 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 Total Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calfrac Well and Total Energy.
Diversification Opportunities for Calfrac Well and Total Energy
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Calfrac and Total is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Calfrac Well Services and Total Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total 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 Total Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Energy Services has no effect on the direction of Calfrac Well i.e., Calfrac Well and Total Energy go up and down completely randomly.
Pair Corralation between Calfrac Well and Total Energy
Assuming the 90 days trading horizon Calfrac Well Services is expected to under-perform the Total Energy. In addition to that, Calfrac Well is 1.14 times more volatile than Total Energy Services. It trades about -0.01 of its total potential returns per unit of risk. Total Energy Services is currently generating about 0.11 per unit of volatility. If you would invest 759.00 in Total Energy Services on August 26, 2024 and sell it today you would earn a total of 421.00 from holding Total Energy Services or generate 55.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calfrac Well Services vs. Total Energy Services
Performance |
| Timeline |
| Calfrac Well Services |
| Total Energy Services |
Calfrac Well and Total Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calfrac Well and Total Energy
The main advantage of trading using opposite Calfrac Well and Total Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calfrac Well position performs unexpectedly, Total 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 Total Energy will offset losses from the drop in Total 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 |
| Total Energy vs. PHX Energy Services | Total Energy vs. Pason Systems | Total Energy vs. CES Energy Solutions | Total Energy vs. Western Energy Services |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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