Correlation Between Sage Potash and CES Energy
Can any of the company-specific risk be diversified away by investing in both Sage Potash and CES 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 Sage Potash and CES Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sage Potash Corp and CES Energy Solutions, you can compare the effects of market volatilities on Sage Potash and CES 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 Sage Potash with a short position of CES Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sage Potash and CES Energy.
Diversification Opportunities for Sage Potash and CES Energy
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sage and CES is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sage Potash Corp and CES Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CES Energy Solutions and Sage Potash 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 Sage Potash Corp are associated (or correlated) with CES Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CES Energy Solutions has no effect on the direction of Sage Potash i.e., Sage Potash and CES Energy go up and down completely randomly.
Pair Corralation between Sage Potash and CES Energy
Assuming the 90 days trading horizon Sage Potash Corp is expected to under-perform the CES Energy. In addition to that, Sage Potash is 2.82 times more volatile than CES Energy Solutions. It trades about -0.01 of its total potential returns per unit of risk. CES Energy Solutions is currently generating about 0.35 per unit of volatility. If you would invest 759.00 in CES Energy Solutions on August 29, 2024 and sell it today you would earn a total of 187.00 from holding CES Energy Solutions or generate 24.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sage Potash Corp vs. CES Energy Solutions
Performance |
| Timeline |
| Sage Potash Corp |
| CES Energy Solutions |
Sage Potash and CES Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sage Potash and CES Energy
The main advantage of trading using opposite Sage Potash and CES Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sage Potash position performs unexpectedly, CES 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 CES Energy will offset losses from the drop in CES Energy's long position.| Sage Potash vs. Uniteds Limited | Sage Potash vs. E L Financial Corp | Sage Potash vs. Canadian General Investments | Sage Potash vs. Clairvest Group |
| CES Energy vs. Secure Energy Services | CES Energy vs. Ensign Energy Services | CES Energy vs. Kelt Exploration | CES Energy vs. Trican Well Service |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |