Correlation Between Enerflex and Newpark Resources
Can any of the company-specific risk be diversified away by investing in both Enerflex and Newpark Resources 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 Newpark Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enerflex and Newpark Resources, you can compare the effects of market volatilities on Enerflex and Newpark Resources 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 Newpark Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerflex and Newpark Resources.
Diversification Opportunities for Enerflex and Newpark Resources
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enerflex and Newpark is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Enerflex and Newpark Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newpark Resources 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 Newpark Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newpark Resources has no effect on the direction of Enerflex i.e., Enerflex and Newpark Resources go up and down completely randomly.
Pair Corralation between Enerflex and Newpark Resources
Given the investment horizon of 90 days Enerflex is expected to generate 1.36 times less return on investment than Newpark Resources. In addition to that, Enerflex is 1.14 times more volatile than Newpark Resources. It trades about 0.04 of its total potential returns per unit of risk. Newpark Resources is currently generating about 0.06 per unit of volatility. If you would invest 409.00 in Newpark Resources on August 23, 2024 and sell it today you would earn a total of 368.00 from holding Newpark Resources or generate 89.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enerflex vs. Newpark Resources
Performance |
| Timeline |
| Enerflex |
| Newpark Resources |
Enerflex and Newpark Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerflex and Newpark Resources
The main advantage of trading using opposite Enerflex and Newpark Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerflex position performs unexpectedly, Newpark Resources 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 Newpark Resources will offset losses from the drop in Newpark Resources' long position.| Enerflex vs. Natural Gas Services | Enerflex vs. Archrock | Enerflex vs. Geospace Technologies | Enerflex vs. Newpark Resources |
| Newpark Resources vs. Now Inc | Newpark Resources vs. Enerflex | Newpark Resources vs. Bristow Group | Newpark Resources vs. Forum Energy Technologies |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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