Correlation Between Precision Drilling and Enerflex
Can any of the company-specific risk be diversified away by investing in both Precision Drilling 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 Precision Drilling and Enerflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precision Drilling and Enerflex, you can compare the effects of market volatilities on Precision Drilling 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 Precision Drilling with a short position of Enerflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision Drilling and Enerflex.
Diversification Opportunities for Precision Drilling and Enerflex
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Precision and Enerflex is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Precision Drilling and Enerflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerflex and Precision Drilling 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 Precision Drilling 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 Precision Drilling i.e., Precision Drilling and Enerflex go up and down completely randomly.
Pair Corralation between Precision Drilling and Enerflex
Assuming the 90 days horizon Precision Drilling is expected to under-perform the Enerflex. In addition to that, Precision Drilling is 1.08 times more volatile than Enerflex. It trades about 0.0 of its total potential returns per unit of risk. Enerflex is currently generating about 0.26 per unit of volatility. If you would invest 666.00 in Enerflex on September 3, 2024 and sell it today you would earn a total of 616.00 from holding Enerflex or generate 92.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precision Drilling vs. Enerflex
Performance |
| Timeline |
| Precision Drilling |
| Enerflex |
Precision Drilling and Enerflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precision Drilling and Enerflex
The main advantage of trading using opposite Precision Drilling and Enerflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision Drilling 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.| Precision Drilling vs. Pason Systems | Precision Drilling vs. Quarterhill | Precision Drilling vs. Westaim Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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