Correlation Between Total Energy and Calfrac Well
Can any of the company-specific risk be diversified away by investing in both Total Energy and Calfrac 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 Total Energy and Calfrac Well into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Total Energy Services and Calfrac Well Services, you can compare the effects of market volatilities on Total Energy and Calfrac 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 Total Energy with a short position of Calfrac Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Energy and Calfrac Well.
Diversification Opportunities for Total Energy and Calfrac Well
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Total and Calfrac is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Total Energy Services and Calfrac Well Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calfrac Well Services and Total 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 Total Energy Services are associated (or correlated) with Calfrac Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calfrac Well Services has no effect on the direction of Total Energy i.e., Total Energy and Calfrac Well go up and down completely randomly.
Pair Corralation between Total Energy and Calfrac Well
Assuming the 90 days trading horizon Total Energy Services is expected to generate 1.3 times more return on investment than Calfrac Well. However, Total Energy is 1.3 times more volatile than Calfrac Well Services. It trades about 0.55 of its potential returns per unit of risk. Calfrac Well Services is currently generating about 0.14 per unit of risk. If you would invest 965.00 in Total Energy Services on August 30, 2024 and sell it today you would earn a total of 206.00 from holding Total Energy Services or generate 21.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Energy Services vs. Calfrac Well Services
Performance |
| Timeline |
| Total Energy Services |
| Calfrac Well Services |
Total Energy and Calfrac Well Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Energy and Calfrac Well
The main advantage of trading using opposite Total Energy and Calfrac Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Energy position performs unexpectedly, Calfrac 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 Calfrac Well will offset losses from the drop in Calfrac Well's long position.| Total Energy vs. PHX Energy Services | Total Energy vs. Pason Systems | Total Energy vs. CES Energy Solutions | Total Energy vs. Western Energy Services |
| Calfrac Well vs. Enbridge Pref 5 | Calfrac Well vs. Enbridge Pref 11 | Calfrac Well vs. Enbridge Pref L | Calfrac Well vs. E Split Corp |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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