Correlation Between Secure Energy and Kelt Exploration
Can any of the company-specific risk be diversified away by investing in both Secure Energy and Kelt Exploration 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 Secure Energy and Kelt Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Secure Energy Services and Kelt Exploration, you can compare the effects of market volatilities on Secure Energy and Kelt Exploration 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 Secure Energy with a short position of Kelt Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secure Energy and Kelt Exploration.
Diversification Opportunities for Secure Energy and Kelt Exploration
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Secure and Kelt is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Secure Energy Services and Kelt Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelt Exploration and Secure 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 Secure Energy Services are associated (or correlated) with Kelt Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelt Exploration has no effect on the direction of Secure Energy i.e., Secure Energy and Kelt Exploration go up and down completely randomly.
Pair Corralation between Secure Energy and Kelt Exploration
Assuming the 90 days trading horizon Secure Energy Services is expected to generate 1.16 times more return on investment than Kelt Exploration. However, Secure Energy is 1.16 times more volatile than Kelt Exploration. It trades about 0.31 of its potential returns per unit of risk. Kelt Exploration is currently generating about 0.09 per unit of risk. If you would invest 1,359 in Secure Energy Services on August 28, 2024 and sell it today you would earn a total of 239.00 from holding Secure Energy Services or generate 17.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Secure Energy Services vs. Kelt Exploration
Performance |
| Timeline |
| Secure Energy Services |
| Kelt Exploration |
Secure Energy and Kelt Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Secure Energy and Kelt Exploration
The main advantage of trading using opposite Secure Energy and Kelt Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Secure Energy position performs unexpectedly, Kelt Exploration 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 Kelt Exploration will offset losses from the drop in Kelt Exploration's long position.| Secure Energy vs. CES Energy Solutions | Secure Energy vs. Ensign Energy Services | Secure Energy vs. Enerflex | Secure Energy vs. Pason Systems |
| Kelt Exploration vs. Yangarra Resources | Kelt Exploration vs. iShares Canadian HYBrid | Kelt Exploration vs. Altagas Cum Red | Kelt Exploration vs. European Residential Real |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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