Correlation Between Calfrac Well and CES Energy
Can any of the company-specific risk be diversified away by investing in both Calfrac Well 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 Calfrac Well and CES Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calfrac Well Services and CES Energy Solutions, you can compare the effects of market volatilities on Calfrac Well 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 Calfrac Well with a short position of CES Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calfrac Well and CES Energy.
Diversification Opportunities for Calfrac Well and CES Energy
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Calfrac and CES is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Calfrac Well 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 Calfrac 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 Calfrac Well 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 Calfrac Well i.e., Calfrac Well and CES Energy go up and down completely randomly.
Pair Corralation between Calfrac Well and CES Energy
Assuming the 90 days trading horizon Calfrac Well Services is expected to generate 0.8 times more return on investment than CES Energy. However, Calfrac Well Services is 1.25 times less risky than CES Energy. It trades about -0.02 of its potential returns per unit of risk. CES Energy Solutions is currently generating about -0.22 per unit of risk. If you would invest 385.00 in Calfrac Well Services on December 4, 2024 and sell it today you would lose (10.00) from holding Calfrac Well Services or give up 2.6% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Calfrac Well Services vs. CES Energy Solutions
Performance |
Timeline |
Calfrac Well Services |
CES Energy Solutions |
Calfrac Well and CES Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Calfrac Well and CES Energy
The main advantage of trading using opposite Calfrac Well and CES Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calfrac Well 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.Calfrac Well vs. Trican Well Service | Calfrac Well vs. Ensign Energy Services | Calfrac Well vs. Precision Drilling | Calfrac Well vs. Secure Energy Services |
CES Energy vs. Secure Energy Services | CES Energy vs. Ensign Energy Services | CES Energy vs. Kelt Exploration | CES Energy vs. Trican Well Service |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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