Correlation Between Trican Well and PHX Energy
Can any of the company-specific risk be diversified away by investing in both Trican Well and PHX 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 Trican Well and PHX Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trican Well Service and PHX Energy Services, you can compare the effects of market volatilities on Trican Well and PHX 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 Trican Well with a short position of PHX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trican Well and PHX Energy.
Diversification Opportunities for Trican Well and PHX Energy
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Trican and PHX is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Trican Well Service and PHX Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHX Energy Services and Trican Well 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 Trican Well Service are associated (or correlated) with PHX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHX Energy Services has no effect on the direction of Trican Well i.e., Trican Well and PHX Energy go up and down completely randomly.
Pair Corralation between Trican Well and PHX Energy
Assuming the 90 days trading horizon Trican Well Service is expected to generate 2.05 times more return on investment than PHX Energy. However, Trican Well is 2.05 times more volatile than PHX Energy Services. It trades about 0.36 of its potential returns per unit of risk. PHX Energy Services is currently generating about 0.43 per unit of risk. If you would invest 461.00 in Trican Well Service on October 20, 2024 and sell it today you would earn a total of 57.00 from holding Trican Well Service or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trican Well Service vs. PHX Energy Services
Performance |
| Timeline |
| Trican Well Service |
| PHX Energy Services |
Trican Well and PHX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trican Well and PHX Energy
The main advantage of trading using opposite Trican Well and PHX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trican Well position performs unexpectedly, PHX 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 PHX Energy will offset losses from the drop in PHX Energy's long position.| Trican Well vs. Calfrac Well Services | Trican Well vs. Precision Drilling | Trican Well vs. Ensign Energy Services | Trican Well vs. Birchcliff Energy |
| PHX Energy vs. CES Energy Solutions | PHX Energy vs. Total Energy Services | PHX Energy vs. Western 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |