Correlation Between Enerflex and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both Enerflex and Baker Hughes 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 Baker Hughes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enerflex and Baker Hughes Co, you can compare the effects of market volatilities on Enerflex and Baker Hughes 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 Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerflex and Baker Hughes.
Diversification Opportunities for Enerflex and Baker Hughes
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enerflex and Baker is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Enerflex and Baker Hughes Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes 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 Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of Enerflex i.e., Enerflex and Baker Hughes go up and down completely randomly.
Pair Corralation between Enerflex and Baker Hughes
Given the investment horizon of 90 days Enerflex is expected to generate 1.17 times more return on investment than Baker Hughes. However, Enerflex is 1.17 times more volatile than Baker Hughes Co. It trades about 0.25 of its potential returns per unit of risk. Baker Hughes Co is currently generating about 0.15 per unit of risk. If you would invest 565.00 in Enerflex on November 2, 2024 and sell it today you would earn a total of 406.00 from holding Enerflex or generate 71.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerflex vs. Baker Hughes Co
Performance |
| Timeline |
| Enerflex |
| Baker Hughes |
Enerflex and Baker Hughes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerflex and Baker Hughes
The main advantage of trading using opposite Enerflex and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerflex position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.| Enerflex vs. Natural Gas Services | Enerflex vs. Archrock | Enerflex vs. Geospace Technologies | Enerflex vs. Forum Energy Technologies |
| Baker Hughes vs. Schlumberger NV | Baker Hughes vs. NOV Inc | Baker Hughes vs. Weatherford International PLC | Baker Hughes vs. Tenaris SA ADR |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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