Correlation Between Enerflex and Ranger Energy
Can any of the company-specific risk be diversified away by investing in both Enerflex and Ranger 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 Enerflex and Ranger Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enerflex and Ranger Energy Services, you can compare the effects of market volatilities on Enerflex and Ranger 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 Enerflex with a short position of Ranger Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerflex and Ranger Energy.
Diversification Opportunities for Enerflex and Ranger Energy
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Enerflex and Ranger is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Enerflex and Ranger Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ranger Energy Services 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 Ranger Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ranger Energy Services has no effect on the direction of Enerflex i.e., Enerflex and Ranger Energy go up and down completely randomly.
Pair Corralation between Enerflex and Ranger Energy
Given the investment horizon of 90 days Enerflex is expected to generate 1.1 times more return on investment than Ranger Energy. However, Enerflex is 1.1 times more volatile than Ranger Energy Services. It trades about 0.84 of its potential returns per unit of risk. Ranger Energy Services is currently generating about 0.62 per unit of risk. If you would invest 638.00 in Enerflex on August 30, 2024 and sell it today you would earn a total of 287.00 from holding Enerflex or generate 44.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Enerflex vs. Ranger Energy Services
Performance |
| Timeline |
| Enerflex |
| Ranger Energy Services |
Enerflex and Ranger Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerflex and Ranger Energy
The main advantage of trading using opposite Enerflex and Ranger Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerflex position performs unexpectedly, Ranger 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 Ranger Energy will offset losses from the drop in Ranger Energy's long position.| Enerflex vs. Natural Gas Services | Enerflex vs. Archrock | Enerflex vs. Geospace Technologies | Enerflex vs. Newpark Resources |
| Ranger Energy vs. Newpark Resources | Ranger Energy vs. ProPetro Holding Corp | Ranger Energy vs. RPC Inc | Ranger Energy vs. MRC Global |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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