Correlation Between Enservco and KLX Energy

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

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

Diversification Opportunities for Enservco and KLX Energy

0.0

Correlation Coefficient

Enservco  KLX Energy

Pay attention - limited upside

The 3 months correlation between Enservco and KLX is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Enservco Co and KLX Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLX Energy Services and Enservco 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 Enservco Co are associated (or correlated) with KLX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLX Energy Services has no effect on the direction of Enservco i.e., Enservco and KLX Energy go up and down completely randomly.

Pair Corralation between Enservco and KLX Energy

If you would invest (100.00) in Enservco Co on December 10, 2024 and sell it today you would earn a total of  100.00  from holding Enservco Co or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Enservco Co  vs.  KLX Energy Services

Enservco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enservco Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Enservco is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

KLX Energy Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days KLX Energy Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Enservco and KLX Energy

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

The idea behind Enservco Co and KLX 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.