Correlation Between Innovex International, and Enerflex

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

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

Diversification Opportunities for Innovex International, and Enerflex

0.01

Correlation Coefficient

Innovex International,  Enerflex

Significant diversification

The 3 months correlation between Innovex and Enerflex is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Innovex International, and Enerflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerflex and Innovex International, 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 Innovex International, are associated (or correlated) with Enerflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerflex has no effect on the direction of Innovex International, i.e., Innovex International, and Enerflex go up and down completely randomly.

Pair Corralation between Innovex International, and Enerflex

Given the investment horizon of 90 days Innovex International, is expected to under-perform the Enerflex. But the stock apears to be less risky and, when comparing its historical volatility, Innovex International, is 1.11 times less risky than Enerflex. The stock trades about -0.03 of its potential returns per unit of risk. The Enerflex is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  720.00  in Enerflex on October 21, 2024 and sell it today you would earn a total of  324.00  from holding Enerflex or generate 45.0% return on investment over 90 days.

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

Innovex International,  vs.  Enerflex

Innovex International,

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Innovex International, are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Innovex International, showed solid returns over the last few months and may actually be approaching a breakup point.

Enerflex

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Enerflex are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Enerflex unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Innovex International, and Enerflex

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

The idea behind Innovex International, and Enerflex 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.