Correlation Between Ensign Energy and Calfrac Well
Can any of the company-specific risk be diversified away by investing in both Ensign Energy and Calfrac Well 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 Calfrac Well 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 Calfrac Well Services, you can compare the effects of market volatilities on Ensign Energy and Calfrac Well 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 Calfrac Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign Energy and Calfrac Well.
Diversification Opportunities for Ensign Energy and Calfrac Well
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ensign and Calfrac is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ensign Energy Services and Calfrac Well Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calfrac Well Services 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 Calfrac Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calfrac Well Services has no effect on the direction of Ensign Energy i.e., Ensign Energy and Calfrac Well go up and down completely randomly.
Pair Corralation between Ensign Energy and Calfrac Well
Assuming the 90 days trading horizon Ensign Energy Services is expected to generate 1.62 times more return on investment than Calfrac Well. However, Ensign Energy is 1.62 times more volatile than Calfrac Well Services. It trades about 0.24 of its potential returns per unit of risk. Calfrac Well Services is currently generating about 0.22 per unit of risk. If you would invest 275.00 in Ensign Energy Services on August 28, 2024 and sell it today you would earn a total of 31.00 from holding Ensign Energy Services or generate 11.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ensign Energy Services vs. Calfrac Well Services
Performance |
| Timeline |
| Ensign Energy Services |
| Calfrac Well Services |
Ensign Energy and Calfrac Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign Energy and Calfrac Well
The main advantage of trading using opposite Ensign Energy and Calfrac Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign Energy position performs unexpectedly, Calfrac Well 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 Calfrac Well will offset losses from the drop in Calfrac Well'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 |
| Calfrac Well vs. Trican Well Service | Calfrac Well vs. Ensign Energy Services | Calfrac Well vs. Precision Drilling | Calfrac Well vs. Secure Energy 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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