Correlation Between Ocumetics Technology and Enerflex

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

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

Diversification Opportunities for Ocumetics Technology and Enerflex

-0.71

Correlation Coefficient

Ocumetics Technology  Enerflex

Pay attention - limited upside

The 3 months correlation between Ocumetics and Enerflex is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ocumetics Technology Corp and Enerflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerflex and Ocumetics Technology 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 Ocumetics Technology Corp 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 Ocumetics Technology i.e., Ocumetics Technology and Enerflex go up and down completely randomly.

Pair Corralation between Ocumetics Technology and Enerflex

Assuming the 90 days horizon Ocumetics Technology Corp is expected to under-perform the Enerflex. In addition to that, Ocumetics Technology is 2.0 times more volatile than Enerflex. It trades about -0.03 of its total potential returns per unit of risk. Enerflex is currently generating about 0.45 per unit of volatility. If you would invest  904.00  in Enerflex on October 11, 2024 and sell it today you would earn a total of  578.00  from holding Enerflex or generate 63.94% return on investment over 90 days.

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

Ocumetics Technology Corp  vs.  Enerflex

Ocumetics Technology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ocumetics Technology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Enerflex

Risk-Adjusted Performance

35 of 100

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Enerflex are ranked lower than 35 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Enerflex displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ocumetics Technology and Enerflex

The main advantage of trading using opposite Ocumetics Technology and Enerflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocumetics Technology 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 Ocumetics Technology Corp 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.