Correlation Between Orca Energy and PHX Energy
Can any of the company-specific risk be diversified away by investing in both Orca Energy and PHX 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 Orca Energy and PHX Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orca Energy Group and PHX Energy Services, you can compare the effects of market volatilities on Orca Energy and PHX 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 Orca Energy with a short position of PHX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orca Energy and PHX Energy.
Diversification Opportunities for Orca Energy and PHX Energy
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Orca and PHX is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Orca Energy Group and PHX Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHX Energy Services and Orca 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 Orca Energy Group are associated (or correlated) with PHX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHX Energy Services has no effect on the direction of Orca Energy i.e., Orca Energy and PHX Energy go up and down completely randomly.
Pair Corralation between Orca Energy and PHX Energy
Assuming the 90 days trading horizon Orca Energy Group is expected to generate 1.75 times more return on investment than PHX Energy. However, Orca Energy is 1.75 times more volatile than PHX Energy Services. It trades about 0.26 of its potential returns per unit of risk. PHX Energy Services is currently generating about 0.07 per unit of risk. If you would invest 275.00 in Orca Energy Group on September 5, 2024 and sell it today you would earn a total of 57.00 from holding Orca Energy Group or generate 20.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orca Energy Group vs. PHX Energy Services
Performance |
| Timeline |
| Orca Energy Group |
| PHX Energy Services |
Orca Energy and PHX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orca Energy and PHX Energy
The main advantage of trading using opposite Orca Energy and PHX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orca Energy position performs unexpectedly, PHX 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 PHX Energy will offset losses from the drop in PHX Energy's long position.| Orca Energy vs. Alvopetro Energy | Orca Energy vs. Hemisphere Energy | Orca Energy vs. Canacol Energy | Orca Energy vs. Source Rock Royalties |
| PHX Energy vs. CES Energy Solutions | PHX Energy vs. Total Energy Services | PHX Energy vs. Western Energy Services |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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