Correlation Between Ensign Energy and BSR Real

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

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

Diversification Opportunities for Ensign Energy and BSR Real

-0.71

Correlation Coefficient

Ensign Energy  BSR Real

Pay attention - limited upside

The 3 months correlation between Ensign and BSR is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ensign Energy Services and BSR Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSR Real Estate and Ensign Energy 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 Ensign Energy Services are associated (or correlated) with BSR Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSR Real Estate has no effect on the direction of Ensign Energy i.e., Ensign Energy and BSR Real go up and down completely randomly.

Pair Corralation between Ensign Energy and BSR Real

Assuming the 90 days trading horizon Ensign Energy Services is expected to generate 1.69 times more return on investment than BSR Real. However, Ensign Energy is 1.69 times more volatile than BSR Real Estate. It trades about 0.07 of its potential returns per unit of risk. BSR Real Estate is currently generating about -0.04 per unit of risk. If you would invest  253.00  in Ensign Energy Services on September 12, 2024 and sell it today you would earn a total of  23.00  from holding Ensign Energy Services or generate 9.09% return on investment over 90 days.

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

Ensign Energy Services  vs.  BSR Real Estate

Ensign Energy Services

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ensign Energy Services are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Ensign Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

BSR Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BSR Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BSR Real is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ensign Energy and BSR Real

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

The idea behind Ensign Energy Services and BSR Real Estate 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.