Correlation Between Ensign Energy and Sun Lif
Can any of the company-specific risk be diversified away by investing in both Ensign Energy and Sun Lif 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 Sun Lif 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 Sun Lif Non, you can compare the effects of market volatilities on Ensign Energy and Sun Lif 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 Sun Lif. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ensign Energy and Sun Lif.
Diversification Opportunities for Ensign Energy and Sun Lif
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ensign and Sun is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ensign Energy Services and Sun Lif Non in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Lif Non 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 Sun Lif. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Lif Non has no effect on the direction of Ensign Energy i.e., Ensign Energy and Sun Lif go up and down completely randomly.
Pair Corralation between Ensign Energy and Sun Lif
Assuming the 90 days trading horizon Ensign Energy Services is expected to generate 2.21 times more return on investment than Sun Lif. However, Ensign Energy is 2.21 times more volatile than Sun Lif Non. It trades about 0.1 of its potential returns per unit of risk. Sun Lif Non is currently generating about -0.02 per unit of risk. If you would invest 221.00 in Ensign Energy Services on September 1, 2024 and sell it today you would earn a total of 74.00 from holding Ensign Energy Services or generate 33.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ensign Energy Services vs. Sun Lif Non
Performance |
| Timeline |
| Ensign Energy Services |
| Sun Lif Non |
Ensign Energy and Sun Lif Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ensign Energy and Sun Lif
The main advantage of trading using opposite Ensign Energy and Sun Lif positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ensign Energy position performs unexpectedly, Sun Lif 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 Sun Lif will offset losses from the drop in Sun Lif'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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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