Correlation Between Kelt Exploration and Ensign Energy
Can any of the company-specific risk be diversified away by investing in both Kelt Exploration and Ensign Energy 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 Kelt Exploration and Ensign Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kelt Exploration and Ensign Energy Services, you can compare the effects of market volatilities on Kelt Exploration and Ensign Energy 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 Kelt Exploration with a short position of Ensign Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kelt Exploration and Ensign Energy.
Diversification Opportunities for Kelt Exploration and Ensign Energy
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kelt and Ensign is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Kelt Exploration and Ensign Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensign Energy Services and Kelt Exploration 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 Kelt Exploration are associated (or correlated) with Ensign Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensign Energy Services has no effect on the direction of Kelt Exploration i.e., Kelt Exploration and Ensign Energy go up and down completely randomly.
Pair Corralation between Kelt Exploration and Ensign Energy
Assuming the 90 days trading horizon Kelt Exploration is expected to generate 1.79 times less return on investment than Ensign Energy. But when comparing it to its historical volatility, Kelt Exploration is 1.35 times less risky than Ensign Energy. It trades about 0.04 of its potential returns per unit of risk. Ensign Energy Services is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 208.00 in Ensign Energy Services on September 1, 2024 and sell it today you would earn a total of 87.00 from holding Ensign Energy Services or generate 41.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kelt Exploration vs. Ensign Energy Services
Performance |
| Timeline |
| Kelt Exploration |
| Ensign Energy Services |
Kelt Exploration and Ensign Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kelt Exploration and Ensign Energy
The main advantage of trading using opposite Kelt Exploration and Ensign Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kelt Exploration position performs unexpectedly, Ensign Energy 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 Ensign Energy will offset losses from the drop in Ensign Energy's long position.| Kelt Exploration vs. Journey Energy | Kelt Exploration vs. Yangarra Resources | Kelt Exploration vs. Obsidian Energy | Kelt Exploration vs. Pine Cliff Energy |
| Ensign Energy vs. Precision Drilling | Ensign Energy vs. Trican Well Service | Ensign Energy vs. Calfrac Well Services | Ensign Energy vs. NuVista 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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