Correlation Between Secure Energy and Pason Systems
Can any of the company-specific risk be diversified away by investing in both Secure Energy and Pason Systems 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 Pason Systems 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 Pason Systems, you can compare the effects of market volatilities on Secure Energy and Pason Systems 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 Pason Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secure Energy and Pason Systems.
Diversification Opportunities for Secure Energy and Pason Systems
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Secure and Pason is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Secure Energy Services and Pason Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pason Systems 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 Pason Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pason Systems has no effect on the direction of Secure Energy i.e., Secure Energy and Pason Systems go up and down completely randomly.
Pair Corralation between Secure Energy and Pason Systems
Assuming the 90 days trading horizon Secure Energy Services is expected to under-perform the Pason Systems. But the stock apears to be less risky and, when comparing its historical volatility, Secure Energy Services is 1.37 times less risky than Pason Systems. The stock trades about -0.08 of its potential returns per unit of risk. The Pason Systems is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,323 in Pason Systems on November 1, 2024 and sell it today you would earn a total of 36.00 from holding Pason Systems or generate 2.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Secure Energy Services vs. Pason Systems
Performance |
| Timeline |
| Secure Energy Services |
| Pason Systems |
Secure Energy and Pason Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Secure Energy and Pason Systems
The main advantage of trading using opposite Secure Energy and Pason Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Secure Energy position performs unexpectedly, Pason Systems 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 Pason Systems will offset losses from the drop in Pason Systems' long position.| Secure Energy vs. CES Energy Solutions | Secure Energy vs. Ensign Energy Services | Secure Energy vs. Enerflex | Secure Energy vs. Pason Systems |
| Pason Systems vs. Enerflex | Pason Systems vs. Mullen Group | Pason Systems vs. Secure Energy Services | Pason Systems vs. Ensign Energy 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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