Correlation Between High Arctic and PHX Energy
Can any of the company-specific risk be diversified away by investing in both High Arctic and PHX 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 High Arctic and PHX Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Arctic Energy and PHX Energy Services, you can compare the effects of market volatilities on High Arctic and PHX 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 High Arctic with a short position of PHX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Arctic and PHX Energy.
Diversification Opportunities for High Arctic and PHX Energy
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between High and PHX is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding High Arctic Energy and PHX Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHX Energy Services and High Arctic 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 High Arctic Energy are associated (or correlated) with PHX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHX Energy Services has no effect on the direction of High Arctic i.e., High Arctic and PHX Energy go up and down completely randomly.
Pair Corralation between High Arctic and PHX Energy
Assuming the 90 days trading horizon High Arctic Energy is expected to generate 4.06 times more return on investment than PHX Energy. However, High Arctic is 4.06 times more volatile than PHX Energy Services. It trades about 0.02 of its potential returns per unit of risk. PHX Energy Services is currently generating about 0.05 per unit of risk. If you would invest 205.00 in High Arctic Energy on September 6, 2024 and sell it today you would lose (90.00) from holding High Arctic Energy or give up 43.9% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
High Arctic Energy vs. PHX Energy Services
Performance |
Timeline |
High Arctic Energy |
PHX Energy Services |
High Arctic and PHX Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with High Arctic and PHX Energy
The main advantage of trading using opposite High Arctic and PHX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Arctic position performs unexpectedly, PHX 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 PHX Energy will offset losses from the drop in PHX Energy's long position.High Arctic vs. CES Energy Solutions | High Arctic vs. Total Energy Services | High Arctic vs. PHX Energy Services |
PHX Energy vs. CES Energy Solutions | PHX Energy vs. Total Energy Services | PHX Energy vs. Western Energy Services |
Check out your portfolio center.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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |