Correlation Between Total Energy and CES Energy
Can any of the company-specific risk be diversified away by investing in both Total Energy and CES 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 Total Energy and CES Energy 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 CES Energy Solutions, you can compare the effects of market volatilities on Total Energy and CES 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 Total Energy with a short position of CES Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Total Energy and CES Energy.
Diversification Opportunities for Total Energy and CES Energy
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Total and CES is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Total Energy Services and CES Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CES Energy Solutions 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 CES Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CES Energy Solutions has no effect on the direction of Total Energy i.e., Total Energy and CES Energy go up and down completely randomly.
Pair Corralation between Total Energy and CES Energy
Assuming the 90 days horizon Total Energy is expected to generate 1.45 times less return on investment than CES Energy. But when comparing it to its historical volatility, Total Energy Services is 1.2 times less risky than CES Energy. It trades about 0.09 of its potential returns per unit of risk. CES Energy Solutions is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 501.00 in CES Energy Solutions on September 3, 2024 and sell it today you would earn a total of 193.00 from holding CES Energy Solutions or generate 38.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Total Energy Services vs. CES Energy Solutions
Performance |
| Timeline |
| Total Energy Services |
| CES Energy Solutions |
Total Energy and CES Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Total Energy and CES Energy
The main advantage of trading using opposite Total Energy and CES Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Total Energy position performs unexpectedly, CES 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 CES Energy will offset losses from the drop in CES Energy's long position.| Total Energy vs. Source Energy Services | Total Energy vs. Trican Well Service | Total Energy vs. STEP Energy Services | Total Energy vs. Koil Energy Solutions |
| CES Energy vs. Tamarack Valley Energy | CES Energy vs. Secure Energy Services | CES Energy vs. Caixabank SA ADR | CES Energy vs. High Arctic 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |