Correlation Between Enservco and Select Energy
Can any of the company-specific risk be diversified away by investing in both Enservco and Select 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 Enservco and Select Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enservco Co and Select Energy Services, you can compare the effects of market volatilities on Enservco and Select 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 Enservco with a short position of Select Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enservco and Select Energy.
Diversification Opportunities for Enservco and Select Energy
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enservco and Select is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Enservco Co and Select Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Energy Services 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 Select Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Energy Services has no effect on the direction of Enservco i.e., Enservco and Select Energy go up and down completely randomly.
Pair Corralation between Enservco and Select Energy
Given the investment horizon of 90 days Enservco Co is expected to under-perform the Select Energy. In addition to that, Enservco is 2.96 times more volatile than Select Energy Services. It trades about -0.5 of its total potential returns per unit of risk. Select Energy Services is currently generating about 0.27 per unit of volatility. If you would invest 1,072 in Select Energy Services on August 28, 2024 and sell it today you would earn a total of 374.00 from holding Select Energy Services or generate 34.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 42.86% |
| Values | Daily Returns |
Enservco Co vs. Select Energy Services
Performance |
| Timeline |
| Enservco |
| Select Energy Services |
Enservco and Select Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enservco and Select Energy
The main advantage of trading using opposite Enservco and Select Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enservco position performs unexpectedly, Select 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 Select Energy will offset losses from the drop in Select Energy's long position.| Enservco vs. Houston American Energy | Enservco vs. Indonesia Energy | Enservco vs. Imperial Petroleum | Enservco vs. Nine Energy Service |
| Select Energy vs. ProPetro Holding Corp | Select Energy vs. RPC Inc | Select Energy vs. MRC Global | Select Energy vs. Expro Group Holdings |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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