Correlation Between Enservco and Sachem Capital
Can any of the company-specific risk be diversified away by investing in both Enservco and Sachem Capital 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 Sachem Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enservco Co and Sachem Capital Corp, you can compare the effects of market volatilities on Enservco and Sachem Capital 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 Sachem Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enservco and Sachem Capital.
Diversification Opportunities for Enservco and Sachem Capital
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enservco and Sachem is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Enservco Co and Sachem Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sachem Capital Corp 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 Sachem Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sachem Capital Corp has no effect on the direction of Enservco i.e., Enservco and Sachem Capital go up and down completely randomly.
Pair Corralation between Enservco and Sachem Capital
Given the investment horizon of 90 days Enservco Co is expected to under-perform the Sachem Capital. In addition to that, Enservco is 180.57 times more volatile than Sachem Capital Corp. It trades about -0.59 of its total potential returns per unit of risk. Sachem Capital Corp is currently generating about 0.05 per unit of volatility. If you would invest 2,506 in Sachem Capital Corp on September 1, 2024 and sell it today you would earn a total of 3.00 from holding Sachem Capital Corp or generate 0.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 28.57% |
| Values | Daily Returns |
Enservco Co vs. Sachem Capital Corp
Performance |
| Timeline |
| Enservco |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sachem Capital Corp |
Enservco and Sachem Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enservco and Sachem Capital
The main advantage of trading using opposite Enservco and Sachem Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enservco position performs unexpectedly, Sachem Capital 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 Sachem Capital will offset losses from the drop in Sachem Capital's long position.| Enservco vs. Houston American Energy | Enservco vs. Indonesia Energy | Enservco vs. Imperial Petroleum | Enservco vs. Nine Energy Service |
| Sachem Capital vs. Sachem Capital Corp | Sachem Capital vs. Eagle Point Credit | Sachem Capital vs. B Riley Financial |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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