Correlation Between Enservco and Profire Ene
Can any of the company-specific risk be diversified away by investing in both Enservco and Profire Ene 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 Enservco and Profire Ene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enservco Co and Profire Ene, you can compare the effects of market volatilities on Enservco and Profire Ene 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 Enservco with a short position of Profire Ene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enservco and Profire Ene.
Diversification Opportunities for Enservco and Profire Ene
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enservco and Profire is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Enservco Co and Profire Ene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profire Ene and Enservco 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 Enservco Co are associated (or correlated) with Profire Ene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profire Ene has no effect on the direction of Enservco i.e., Enservco and Profire Ene go up and down completely randomly.
Pair Corralation between Enservco and Profire Ene
Given the investment horizon of 90 days Enservco Co is expected to under-perform the Profire Ene. In addition to that, Enservco is 1.51 times more volatile than Profire Ene. It trades about -0.07 of its total potential returns per unit of risk. Profire Ene is currently generating about 0.06 per unit of volatility. If you would invest 116.00 in Profire Ene on August 28, 2024 and sell it today you would earn a total of 136.00 from holding Profire Ene or generate 117.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.58% |
| Values | Daily Returns |
Enservco Co vs. Profire Ene
Performance |
| Timeline |
| Enservco |
| Profire Ene |
Enservco and Profire Ene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enservco and Profire Ene
The main advantage of trading using opposite Enservco and Profire Ene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enservco position performs unexpectedly, Profire Ene 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 Profire Ene will offset losses from the drop in Profire Ene's long position.| Enservco vs. Houston American Energy | Enservco vs. Indonesia Energy | Enservco vs. Imperial Petroleum | Enservco vs. Nine Energy Service |
| Profire Ene vs. Enservco Co | Profire Ene vs. Nine Energy Service | Profire Ene vs. Enerflex | Profire Ene vs. Geospace 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 Stocks Directory module to find actively traded stocks across global markets.
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