Correlation Between Enerflex and Ensign Energy

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Can any of the company-specific risk be diversified away by investing in both Enerflex and Ensign 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 Enerflex and Ensign Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enerflex and Ensign Energy Services, you can compare the effects of market volatilities on Enerflex and Ensign 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 Enerflex with a short position of Ensign Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerflex and Ensign Energy.

Diversification Opportunities for Enerflex and Ensign Energy

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Enerflex and Ensign is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Enerflex and Ensign Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensign Energy Services and Enerflex 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 Enerflex are associated (or correlated) with Ensign Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensign Energy Services has no effect on the direction of Enerflex i.e., Enerflex and Ensign Energy go up and down completely randomly.

Pair Corralation between Enerflex and Ensign Energy

Assuming the 90 days trading horizon Enerflex is expected to generate 0.76 times more return on investment than Ensign Energy. However, Enerflex is 1.32 times less risky than Ensign Energy. It trades about 0.42 of its potential returns per unit of risk. Ensign Energy Services is currently generating about 0.13 per unit of risk. If you would invest  897.00  in Enerflex on October 27, 2024 and sell it today you would earn a total of  603.00  from holding Enerflex or generate 67.22% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Enerflex  vs.  Ensign Energy Services

 Performance 
       Timeline  
Enerflex 

Risk-Adjusted Performance

33 of 100

 
Weak
 
Strong
Very Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Enerflex are ranked lower than 33 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Enerflex displayed solid returns over the last few months and may actually be approaching a breakup point.
Ensign Energy Services 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Ensign Energy Services are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Ensign Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Enerflex and Ensign Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Enerflex and Ensign Energy

The main advantage of trading using opposite Enerflex and Ensign Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerflex position performs unexpectedly, Ensign 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 Ensign Energy will offset losses from the drop in Ensign Energy's long position.
The idea behind Enerflex and Ensign Energy Services pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.

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