Correlation Between Enservco and Profire Ene

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

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

Diversification Opportunities for Enservco and Profire Ene

0.0

Correlation Coefficient

Enservco  Profire Ene

Pay attention - limited upside

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

Pair Corralation between Enservco and Profire Ene

If you would invest (100.00) in Profire Ene on December 2, 2024 and sell it today you would earn a total of  100.00  from holding Profire Ene or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Enservco Co  vs.  Profire Ene

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.

Profire Ene

Risk-Adjusted Performance

Very Weak

Over the last 90 days Profire Ene has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, Profire Ene is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Enservco and Profire Ene

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

The idea behind Enservco Co and Profire Ene 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.