Correlation Between Profire Ene and Recon Technology
Can any of the company-specific risk be diversified away by investing in both Profire Ene and Recon Technology 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 Profire Ene and Recon Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Profire Ene and Recon Technology, you can compare the effects of market volatilities on Profire Ene and Recon Technology 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 Profire Ene with a short position of Recon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profire Ene and Recon Technology.
Diversification Opportunities for Profire Ene and Recon Technology
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Profire and Recon is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Profire Ene and Recon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recon Technology and Profire Ene 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 Profire Ene are associated (or correlated) with Recon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recon Technology has no effect on the direction of Profire Ene i.e., Profire Ene and Recon Technology go up and down completely randomly.
Pair Corralation between Profire Ene and Recon Technology
Given the investment horizon of 90 days Profire Ene is expected to generate 1.54 times more return on investment than Recon Technology. However, Profire Ene is 1.54 times more volatile than Recon Technology. It trades about 0.22 of its potential returns per unit of risk. Recon Technology is currently generating about -0.17 per unit of risk. If you would invest 171.00 in Profire Ene on August 27, 2024 and sell it today you would earn a total of 81.00 from holding Profire Ene or generate 47.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profire Ene vs. Recon Technology
Performance |
| Timeline |
| Profire Ene |
| Recon Technology |
Profire Ene and Recon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profire Ene and Recon Technology
The main advantage of trading using opposite Profire Ene and Recon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profire Ene position performs unexpectedly, Recon Technology 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 Recon Technology will offset losses from the drop in Recon Technology's long position.| Profire Ene vs. Enservco Co | Profire Ene vs. Nine Energy Service | Profire Ene vs. Enerflex | Profire Ene vs. Geospace Technologies |
| Recon Technology vs. Saipem SpA | Recon Technology vs. Worley Parsons | Recon Technology vs. Petrofac Ltd ADR | Recon Technology vs. Calfrac Well 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |