Correlation Between Ensign Energy and Birchcliff Energy
Can any of the company-specific risk be diversified away by investing in both Ensign Energy and Birchcliff 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 Ensign Energy and Birchcliff Energy 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 Birchcliff Energy, you can compare the effects of market volatilities on Ensign Energy and Birchcliff 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 Ensign Energy with a short position of Birchcliff Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign Energy and Birchcliff Energy.
Diversification Opportunities for Ensign Energy and Birchcliff Energy
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ensign and Birchcliff is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ensign Energy Services and Birchcliff Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchcliff Energy 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 Birchcliff Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchcliff Energy has no effect on the direction of Ensign Energy i.e., Ensign Energy and Birchcliff Energy go up and down completely randomly.
Pair Corralation between Ensign Energy and Birchcliff Energy
Assuming the 90 days trading horizon Ensign Energy Services is expected to generate 1.19 times more return on investment than Birchcliff Energy. However, Ensign Energy is 1.19 times more volatile than Birchcliff Energy. It trades about 0.07 of its potential returns per unit of risk. Birchcliff Energy is currently generating about 0.0 per unit of risk. If you would invest 206.00 in Ensign Energy Services on August 24, 2024 and sell it today you would earn a total of 110.00 from holding Ensign Energy Services or generate 53.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ensign Energy Services vs. Birchcliff Energy
Performance |
| Timeline |
| Ensign Energy Services |
| Birchcliff Energy |
Ensign Energy and Birchcliff Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign Energy and Birchcliff Energy
The main advantage of trading using opposite Ensign Energy and Birchcliff Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign Energy position performs unexpectedly, Birchcliff 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 Birchcliff Energy will offset losses from the drop in Birchcliff Energy'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 |
| Birchcliff Energy vs. Trican Well Service | Birchcliff Energy vs. Ensign Energy Services | Birchcliff Energy vs. Calfrac Well Services |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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