Correlation Between Secure Energy and Trican Well
Can any of the company-specific risk be diversified away by investing in both Secure Energy and Trican Well 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 Trican Well 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 Trican Well Service, you can compare the effects of market volatilities on Secure Energy and Trican Well 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 Trican Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of Secure Energy and Trican Well.
Diversification Opportunities for Secure Energy and Trican Well
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Secure and Trican is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Secure Energy Services and Trican Well Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trican Well Service 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 Trican Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trican Well Service has no effect on the direction of Secure Energy i.e., Secure Energy and Trican Well go up and down completely randomly.
Pair Corralation between Secure Energy and Trican Well
Assuming the 90 days trading horizon Secure Energy Services is expected to generate 0.74 times more return on investment than Trican Well. However, Secure Energy Services is 1.35 times less risky than Trican Well. It trades about -0.26 of its potential returns per unit of risk. Trican Well Service is currently generating about -0.34 per unit of risk. If you would invest 1,594 in Secure Energy Services on November 18, 2024 and sell it today you would lose (123.00) from holding Secure Energy Services or give up 7.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Secure Energy Services vs. Trican Well Service
Performance |
| Timeline |
| Secure Energy Services |
| Trican Well Service |
Secure Energy and Trican Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Secure Energy and Trican Well
The main advantage of trading using opposite Secure Energy and Trican Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Secure Energy position performs unexpectedly, Trican Well 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 Trican Well will offset losses from the drop in Trican Well's long position.| Secure Energy vs. CES Energy Solutions | Secure Energy vs. Ensign Energy Services | Secure Energy vs. Enerflex | Secure Energy vs. Pason Systems |
| Trican Well vs. Calfrac Well Services | Trican Well vs. Precision Drilling | Trican Well vs. Ensign Energy Services | Trican Well vs. Birchcliff Energy |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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