Correlation Between Enerflex and Dmc Global

Can any of the company-specific risk be diversified away by investing in both Enerflex and Dmc Global 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 Dmc Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Enerflex and Dmc Global, you can compare the effects of market volatilities on Enerflex and Dmc Global 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 Dmc Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerflex and Dmc Global.

Diversification Opportunities for Enerflex and Dmc Global

-0.61

Correlation Coefficient

Enerflex  Dmc Global

Excellent diversification

The 3 months correlation between Enerflex and Dmc is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Enerflex and Dmc Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dmc Global 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 Dmc Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dmc Global has no effect on the direction of Enerflex i.e., Enerflex and Dmc Global go up and down completely randomly.

Pair Corralation between Enerflex and Dmc Global

Given the investment horizon of 90 days Enerflex is expected to under-perform the Dmc Global. But the stock apears to be less risky and, when comparing its historical volatility, Enerflex is 1.42 times less risky than Dmc Global. The stock trades about -0.09 of its potential returns per unit of risk. The Dmc Global is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  828.00  in Dmc Global on December 2, 2024 and sell it today you would earn a total of  20.00  from holding Dmc Global or generate 2.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Enerflex  vs.  Dmc Global

Enerflex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enerflex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Dmc Global

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dmc Global are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Dmc Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Enerflex and Dmc Global

The main advantage of trading using opposite Enerflex and Dmc Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerflex position performs unexpectedly, Dmc Global 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 Dmc Global will offset losses from the drop in Dmc Global's long position.

The idea behind Enerflex and Dmc Global 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.