Correlation Between Hurricane Energy and EnQuest PLC

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

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

Diversification Opportunities for Hurricane Energy and EnQuest PLC

0.44

Correlation Coefficient

Hurricane Energy  EnQuest PLC

Very weak diversification

The 3 months correlation between Hurricane and EnQuest is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Hurricane Energy Plc and EnQuest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EnQuest PLC and Hurricane 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 Hurricane Energy Plc are associated (or correlated) with EnQuest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EnQuest PLC has no effect on the direction of Hurricane Energy i.e., Hurricane Energy and EnQuest PLC go up and down completely randomly.

Pair Corralation between Hurricane Energy and EnQuest PLC

If you would invest  8.43  in Hurricane Energy Plc on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Hurricane Energy Plc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Hurricane Energy Plc  vs.  EnQuest PLC

Hurricane Energy Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hurricane Energy Plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Hurricane Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

EnQuest PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EnQuest PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Hurricane Energy and EnQuest PLC

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

The idea behind Hurricane Energy Plc and EnQuest PLC 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..