Correlation Between Enerflex and RPC

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

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

Diversification Opportunities for Enerflex and RPC

0.5

Correlation Coefficient

Enerflex  RPC

Very weak diversification

The 3 months correlation between Enerflex and RPC is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Enerflex and RPC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPC Inc 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 RPC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPC Inc has no effect on the direction of Enerflex i.e., Enerflex and RPC go up and down completely randomly.

Pair Corralation between Enerflex and RPC

Given the investment horizon of 90 days Enerflex is expected to under-perform the RPC. But the stock apears to be less risky and, when comparing its historical volatility, Enerflex is 1.33 times less risky than RPC. The stock trades about -0.43 of its potential returns per unit of risk. The RPC Inc is currently generating about -0.3 of returns per unit of risk over similar time horizon. If you would invest  652.00  in RPC Inc on November 28, 2024 and sell it today you would lose (99.00) from holding RPC Inc or give up 15.18% of portfolio value over 90 days.

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

Enerflex  vs.  RPC Inc

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 latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

RPC Inc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Enerflex and RPC

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

The idea behind Enerflex and RPC Inc 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.