Correlation Between Oil States and Enerflex
Can any of the company-specific risk be diversified away by investing in both Oil States 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 Oil States and Enerflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil States International and Enerflex, you can compare the effects of market volatilities on Oil States 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 Oil States with a short position of Enerflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil States and Enerflex.
Diversification Opportunities for Oil States and Enerflex
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Oil and Enerflex is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Oil States International and Enerflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerflex and Oil States 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 Oil States International 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 Oil States i.e., Oil States and Enerflex go up and down completely randomly.
Pair Corralation between Oil States and Enerflex
Considering the 90-day investment horizon Oil States International is expected to generate 0.94 times more return on investment than Enerflex. However, Oil States International is 1.06 times less risky than Enerflex. It trades about -0.13 of its potential returns per unit of risk. Enerflex is currently generating about -0.28 per unit of risk. If you would invest 574.00 in Oil States International on November 18, 2024 and sell it today you would lose (32.00) from holding Oil States International or give up 5.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil States International vs. Enerflex
Performance |
| Timeline |
| Oil States International |
| Enerflex |
Oil States and Enerflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil States and Enerflex
The main advantage of trading using opposite Oil States and Enerflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil States 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.| Oil States vs. Oceaneering International | Oil States vs. ChampionX | Oil States vs. TechnipFMC PLC | Oil States vs. Helix Energy Solutions |
| Enerflex vs. Natural Gas Services | Enerflex vs. Archrock | Enerflex vs. Geospace Technologies | Enerflex vs. Forum Energy Technologies |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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