Correlation Between Falcon Energy and Enerflex
Can any of the company-specific risk be diversified away by investing in both Falcon Energy and Enerflex 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 Falcon Energy and Enerflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Energy Materials and Enerflex, you can compare the effects of market volatilities on Falcon Energy and Enerflex 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 Falcon Energy with a short position of Enerflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Energy and Enerflex.
Diversification Opportunities for Falcon Energy and Enerflex
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Falcon and Enerflex is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Energy Materials and Enerflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerflex and Falcon 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 Falcon Energy Materials are associated (or correlated) with Enerflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerflex has no effect on the direction of Falcon Energy i.e., Falcon Energy and Enerflex go up and down completely randomly.
Pair Corralation between Falcon Energy and Enerflex
Assuming the 90 days trading horizon Falcon Energy Materials is expected to generate 1.37 times more return on investment than Enerflex. However, Falcon Energy is 1.37 times more volatile than Enerflex. It trades about 0.04 of its potential returns per unit of risk. Enerflex is currently generating about 0.05 per unit of risk. If you would invest 60.00 in Falcon Energy Materials on August 31, 2024 and sell it today you would earn a total of 23.00 from holding Falcon Energy Materials or generate 38.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Energy Materials vs. Enerflex
Performance |
| Timeline |
| Falcon Energy Materials |
| Enerflex |
Falcon Energy and Enerflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Energy and Enerflex
The main advantage of trading using opposite Falcon Energy and Enerflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Energy position performs unexpectedly, Enerflex 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 Enerflex will offset losses from the drop in Enerflex's long position.| Falcon Energy vs. Ramp Metals | Falcon Energy vs. Information Services | Falcon Energy vs. Rocky Mountain Liquor | Falcon Energy vs. Verizon Communications CDR |
| Enerflex vs. Forum Energy Metals | Enerflex vs. iShares Canadian HYBrid | Enerflex vs. Brompton European Dividend | Enerflex vs. Solar Alliance Energy |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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