Correlation Between Enerflex and Archrock
Can any of the company-specific risk be diversified away by investing in both Enerflex and Archrock 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 Archrock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enerflex and Archrock, you can compare the effects of market volatilities on Enerflex and Archrock 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 Archrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerflex and Archrock.
Diversification Opportunities for Enerflex and Archrock
Almost no diversification
The 3 months correlation between Enerflex and Archrock is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Enerflex and Archrock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Archrock 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 Archrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Archrock has no effect on the direction of Enerflex i.e., Enerflex and Archrock go up and down completely randomly.
Pair Corralation between Enerflex and Archrock
Given the investment horizon of 90 days Enerflex is expected to generate 0.64 times more return on investment than Archrock. However, Enerflex is 1.56 times less risky than Archrock. It trades about 0.82 of its potential returns per unit of risk. Archrock is currently generating about 0.36 per unit of risk. If you would invest 639.00 in Enerflex on August 24, 2024 and sell it today you would earn a total of 285.00 from holding Enerflex or generate 44.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerflex vs. Archrock
Performance |
| Timeline |
| Enerflex |
| Archrock |
Enerflex and Archrock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerflex and Archrock
The main advantage of trading using opposite Enerflex and Archrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerflex position performs unexpectedly, Archrock 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 Archrock will offset losses from the drop in Archrock's long position.| Enerflex vs. Natural Gas Services | Enerflex vs. Archrock | Enerflex vs. Geospace Technologies | Enerflex vs. Newpark Resources |
| Archrock vs. ProPetro Holding Corp | Archrock vs. Select Energy Services | Archrock vs. USA Compression Partners | Archrock vs. Par Pacific Holdings |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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