Correlation Between Ensign Energy and Accelerate Canadian
Can any of the company-specific risk be diversified away by investing in both Ensign Energy and Accelerate Canadian 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 Ensign Energy and Accelerate Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ensign Energy Services and Accelerate Canadian Long, you can compare the effects of market volatilities on Ensign Energy and Accelerate Canadian 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 Ensign Energy with a short position of Accelerate Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign Energy and Accelerate Canadian.
Diversification Opportunities for Ensign Energy and Accelerate Canadian
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ensign and Accelerate is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ensign Energy Services and Accelerate Canadian Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accelerate Canadian Long and Ensign Energy 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 Ensign Energy Services are associated (or correlated) with Accelerate Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accelerate Canadian Long has no effect on the direction of Ensign Energy i.e., Ensign Energy and Accelerate Canadian go up and down completely randomly.
Pair Corralation between Ensign Energy and Accelerate Canadian
Assuming the 90 days trading horizon Ensign Energy Services is expected to generate 3.3 times more return on investment than Accelerate Canadian. However, Ensign Energy is 3.3 times more volatile than Accelerate Canadian Long. It trades about 0.07 of its potential returns per unit of risk. Accelerate Canadian Long is currently generating about 0.11 per unit of risk. If you would invest 204.00 in Ensign Energy Services on August 29, 2024 and sell it today you would earn a total of 92.00 from holding Ensign Energy Services or generate 45.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ensign Energy Services vs. Accelerate Canadian Long
Performance |
| Timeline |
| Ensign Energy Services |
| Accelerate Canadian Long |
Ensign Energy and Accelerate Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign Energy and Accelerate Canadian
The main advantage of trading using opposite Ensign Energy and Accelerate Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign Energy position performs unexpectedly, Accelerate Canadian 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 Accelerate Canadian will offset losses from the drop in Accelerate Canadian's long position.| Ensign Energy vs. Precision Drilling | Ensign Energy vs. Trican Well Service | Ensign Energy vs. Calfrac Well Services | Ensign Energy vs. NuVista Energy |
| Accelerate Canadian vs. Accelerate Absolute Return | Accelerate Canadian vs. Accelerate Arbitrage | Accelerate Canadian vs. Accelerate OneChoice Alternative | Accelerate Canadian vs. First Trust AlphaDEX |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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