Correlation Between E Split and Surge Energy

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

By analyzing existing cross correlation between E Split Corp and Surge Energy, you can compare the effects of market volatilities on E Split and Surge 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 E Split with a short position of Surge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Split and Surge Energy.

Diversification Opportunities for E Split and Surge Energy

0.25

Correlation Coefficient

E Split  Surge Energy

Modest diversification

The 3 months correlation between ENS-PA and Surge is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding E Split Corp and Surge Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Energy and E Split 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 E Split Corp are associated (or correlated) with Surge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Energy has no effect on the direction of E Split i.e., E Split and Surge Energy go up and down completely randomly.

Pair Corralation between E Split and Surge Energy

Assuming the 90 days trading horizon E Split is expected to generate 2.74 times less return on investment than Surge Energy. But when comparing it to its historical volatility, E Split Corp is 3.06 times less risky than Surge Energy. It trades about 0.1 of its potential returns per unit of risk. Surge Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  554.00  in Surge Energy on December 30, 2024 and sell it today you would earn a total of  68.00  from holding Surge Energy or generate 12.27% return on investment over 90 days.

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

E Split Corp  vs.  Surge Energy

E Split Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in E Split Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, E Split is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Surge Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Surge Energy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Surge Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with E Split and Surge Energy

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

The idea behind E Split Corp and Surge Energy 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.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.