Correlation Between Forum Energy and Enerflex
Can any of the company-specific risk be diversified away by investing in both Forum 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 Forum Energy and Enerflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Forum Energy Metals and Enerflex, you can compare the effects of market volatilities on Forum 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 Forum Energy with a short position of Enerflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Forum Energy and Enerflex.
Diversification Opportunities for Forum Energy and Enerflex
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Forum and Enerflex is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Forum Energy Metals and Enerflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerflex and Forum 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 Forum Energy Metals 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 Forum Energy i.e., Forum Energy and Enerflex go up and down completely randomly.
Pair Corralation between Forum Energy and Enerflex
Assuming the 90 days horizon Forum Energy Metals is expected to under-perform the Enerflex. In addition to that, Forum Energy is 2.93 times more volatile than Enerflex. It trades about 0.0 of its total potential returns per unit of risk. Enerflex is currently generating about 0.39 per unit of volatility. If you would invest 762.00 in Enerflex on September 2, 2024 and sell it today you would earn a total of 517.00 from holding Enerflex or generate 67.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Forum Energy Metals vs. Enerflex
Performance |
| Timeline |
| Forum Energy Metals |
| Enerflex |
Forum Energy and Enerflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Forum Energy and Enerflex
The main advantage of trading using opposite Forum Energy and Enerflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Forum 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.The idea behind Forum Energy Metals and Enerflex pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Enerflex vs. Broadcom | Enerflex vs. AKITA Drilling | Enerflex vs. Canaf Investments | Enerflex vs. Precision Drilling |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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