Correlation Between Natural Gas and Enerflex
Can any of the company-specific risk be diversified away by investing in both Natural Gas 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 Natural Gas and Enerflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Gas Services and Enerflex, you can compare the effects of market volatilities on Natural Gas 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 Natural Gas with a short position of Enerflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Gas and Enerflex.
Diversification Opportunities for Natural Gas and Enerflex
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Natural and Enerflex is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Natural Gas Services and Enerflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerflex and Natural Gas 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 Natural Gas Services 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 Natural Gas i.e., Natural Gas and Enerflex go up and down completely randomly.
Pair Corralation between Natural Gas and Enerflex
Considering the 90-day investment horizon Natural Gas is expected to generate 1.09 times less return on investment than Enerflex. In addition to that, Natural Gas is 1.65 times more volatile than Enerflex. It trades about 0.5 of its total potential returns per unit of risk. Enerflex is currently generating about 0.89 per unit of volatility. If you would invest 647.00 in Enerflex on August 27, 2024 and sell it today you would earn a total of 293.00 from holding Enerflex or generate 45.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Gas Services vs. Enerflex
Performance |
| Timeline |
| Natural Gas Services |
| Enerflex |
Natural Gas and Enerflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Gas and Enerflex
The main advantage of trading using opposite Natural Gas and Enerflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Gas 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.| Natural Gas vs. ProPetro Holding Corp | Natural Gas vs. RPC Inc | Natural Gas vs. MRC Global | Natural Gas vs. Expro Group Holdings |
| Enerflex vs. Natural Gas Services | Enerflex vs. Archrock | Enerflex vs. Geospace Technologies | Enerflex vs. Newpark Resources |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |