Correlation Between Pason Systems and Secure Energy
Can any of the company-specific risk be diversified away by investing in both Pason Systems and Secure 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 Pason Systems and Secure Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pason Systems and Secure Energy Services, you can compare the effects of market volatilities on Pason Systems and Secure 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 Pason Systems with a short position of Secure Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pason Systems and Secure Energy.
Diversification Opportunities for Pason Systems and Secure Energy
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pason and Secure is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Pason Systems and Secure Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secure Energy Services and Pason Systems 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 Pason Systems are associated (or correlated) with Secure Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secure Energy Services has no effect on the direction of Pason Systems i.e., Pason Systems and Secure Energy go up and down completely randomly.
Pair Corralation between Pason Systems and Secure Energy
Assuming the 90 days trading horizon Pason Systems is expected to under-perform the Secure Energy. But the stock apears to be less risky and, when comparing its historical volatility, Pason Systems is 1.24 times less risky than Secure Energy. The stock trades about -0.01 of its potential returns per unit of risk. The Secure Energy Services is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,125 in Secure Energy Services on August 24, 2024 and sell it today you would earn a total of 529.00 from holding Secure Energy Services or generate 47.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pason Systems vs. Secure Energy Services
Performance |
| Timeline |
| Pason Systems |
| Secure Energy Services |
Pason Systems and Secure Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pason Systems and Secure Energy
The main advantage of trading using opposite Pason Systems and Secure Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pason Systems position performs unexpectedly, Secure 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 Secure Energy will offset losses from the drop in Secure Energy's long position.| Pason Systems vs. Enerflex | Pason Systems vs. Mullen Group | Pason Systems vs. Secure Energy Services | Pason Systems vs. Ensign Energy Services |
| Secure Energy vs. CES Energy Solutions | Secure Energy vs. Ensign Energy Services | Secure Energy vs. Enerflex | Secure Energy vs. Pason Systems |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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