Correlation Between Koil Energy and CES Energy
Can any of the company-specific risk be diversified away by investing in both Koil Energy and CES 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 Koil Energy and CES Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koil Energy Solutions and CES Energy Solutions, you can compare the effects of market volatilities on Koil Energy and CES 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 Koil Energy with a short position of CES Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koil Energy and CES Energy.
Diversification Opportunities for Koil Energy and CES Energy
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Koil and CES is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Koil Energy Solutions and CES Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CES Energy Solutions and Koil 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 Koil Energy Solutions are associated (or correlated) with CES Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CES Energy Solutions has no effect on the direction of Koil Energy i.e., Koil Energy and CES Energy go up and down completely randomly.
Pair Corralation between Koil Energy and CES Energy
Given the investment horizon of 90 days Koil Energy Solutions is expected to generate 1.94 times more return on investment than CES Energy. However, Koil Energy is 1.94 times more volatile than CES Energy Solutions. It trades about 0.16 of its potential returns per unit of risk. CES Energy Solutions is currently generating about 0.11 per unit of risk. If you would invest 75.00 in Koil Energy Solutions on September 3, 2024 and sell it today you would earn a total of 113.00 from holding Koil Energy Solutions or generate 150.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Koil Energy Solutions vs. CES Energy Solutions
Performance |
| Timeline |
| Koil Energy Solutions |
| CES Energy Solutions |
Koil Energy and CES Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koil Energy and CES Energy
The main advantage of trading using opposite Koil Energy and CES Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koil Energy position performs unexpectedly, CES 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 CES Energy will offset losses from the drop in CES Energy's long position.| Koil Energy vs. Enterprise Group | Koil Energy vs. High Arctic Energy | Koil Energy vs. Total Energy Services | Koil Energy vs. Trican Well Service |
| CES Energy vs. Tamarack Valley Energy | CES Energy vs. Secure Energy Services | CES Energy vs. Caixabank SA ADR | CES Energy vs. High Arctic 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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