Correlation Between Enerflex and Westaim Corp
Can any of the company-specific risk be diversified away by investing in both Enerflex and Westaim Corp 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 Enerflex and Westaim Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enerflex and Westaim Corp, you can compare the effects of market volatilities on Enerflex and Westaim Corp 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 Enerflex with a short position of Westaim Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerflex and Westaim Corp.
Diversification Opportunities for Enerflex and Westaim Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enerflex and Westaim is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Enerflex and Westaim Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westaim Corp and Enerflex 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 Enerflex are associated (or correlated) with Westaim Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westaim Corp has no effect on the direction of Enerflex i.e., Enerflex and Westaim Corp go up and down completely randomly.
Pair Corralation between Enerflex and Westaim Corp
Assuming the 90 days trading horizon Enerflex is expected to generate 1.76 times more return on investment than Westaim Corp. However, Enerflex is 1.76 times more volatile than Westaim Corp. It trades about 0.06 of its potential returns per unit of risk. Westaim Corp is currently generating about 0.07 per unit of risk. If you would invest 553.00 in Enerflex on January 23, 2025 and sell it today you would earn a total of 340.00 from holding Enerflex or generate 61.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Enerflex vs. Westaim Corp
Performance |
| Timeline |
| Enerflex |
| Westaim Corp |
Enerflex and Westaim Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerflex and Westaim Corp
The main advantage of trading using opposite Enerflex and Westaim Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerflex position performs unexpectedly, Westaim Corp 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 Westaim Corp will offset losses from the drop in Westaim Corp's long position.| Enerflex vs. Aya Gold Silver | Enerflex vs. Slate Grocery REIT | Enerflex vs. Millennium Silver Corp | Enerflex vs. Maple Leaf Foods |
| Westaim Corp vs. Pulse Seismic | Westaim Corp vs. Quarterhill | Westaim Corp vs. Kneat Inc | Westaim Corp vs. Trisura Group |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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