Correlation Between Koil Energy and Shawcor
Can any of the company-specific risk be diversified away by investing in both Koil Energy and Shawcor 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 Shawcor 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 Shawcor, you can compare the effects of market volatilities on Koil Energy and Shawcor 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 Shawcor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koil Energy and Shawcor.
Diversification Opportunities for Koil Energy and Shawcor
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Koil and Shawcor is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Koil Energy Solutions and Shawcor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shawcor 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 Shawcor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shawcor has no effect on the direction of Koil Energy i.e., Koil Energy and Shawcor go up and down completely randomly.
Pair Corralation between Koil Energy and Shawcor
Given the investment horizon of 90 days Koil Energy Solutions is expected to generate 1.77 times more return on investment than Shawcor. However, Koil Energy is 1.77 times more volatile than Shawcor. It trades about 0.08 of its potential returns per unit of risk. Shawcor is currently generating about 0.12 per unit of risk. If you would invest 52.00 in Koil Energy Solutions on September 3, 2024 and sell it today you would earn a total of 136.00 from holding Koil Energy Solutions or generate 261.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 30.91% |
| Values | Daily Returns |
Koil Energy Solutions vs. Shawcor
Performance |
| Timeline |
| Koil Energy Solutions |
| Shawcor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Koil Energy and Shawcor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koil Energy and Shawcor
The main advantage of trading using opposite Koil Energy and Shawcor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koil Energy position performs unexpectedly, Shawcor 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 Shawcor will offset losses from the drop in Shawcor'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 |
| Shawcor vs. STEP Energy Services | Shawcor vs. Total Energy Services | Shawcor vs. Trican Well Service | Shawcor 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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