Correlation Between Ensign Energy and Sienna Senior
Can any of the company-specific risk be diversified away by investing in both Ensign Energy and Sienna Senior 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 Sienna Senior 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 Sienna Senior Living, you can compare the effects of market volatilities on Ensign Energy and Sienna Senior 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 Sienna Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign Energy and Sienna Senior.
Diversification Opportunities for Ensign Energy and Sienna Senior
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ensign and Sienna is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ensign Energy Services and Sienna Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sienna Senior Living 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 Sienna Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sienna Senior Living has no effect on the direction of Ensign Energy i.e., Ensign Energy and Sienna Senior go up and down completely randomly.
Pair Corralation between Ensign Energy and Sienna Senior
Assuming the 90 days trading horizon Ensign Energy Services is expected to under-perform the Sienna Senior. In addition to that, Ensign Energy is 2.16 times more volatile than Sienna Senior Living. It trades about 0.0 of its total potential returns per unit of risk. Sienna Senior Living is currently generating about 0.0 per unit of volatility. If you would invest 1,564 in Sienna Senior Living on November 4, 2024 and sell it today you would lose (1.00) from holding Sienna Senior Living or give up 0.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ensign Energy Services vs. Sienna Senior Living
Performance |
| Timeline |
| Ensign Energy Services |
| Sienna Senior Living |
Ensign Energy and Sienna Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign Energy and Sienna Senior
The main advantage of trading using opposite Ensign Energy and Sienna Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign Energy position performs unexpectedly, Sienna Senior 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 Sienna Senior will offset losses from the drop in Sienna Senior'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 |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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