Correlation Between ACT Energy and PHX Energy
Can any of the company-specific risk be diversified away by investing in both ACT Energy 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 ACT Energy and PHX Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACT Energy Technologies and PHX Energy Services, you can compare the effects of market volatilities on ACT Energy 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 ACT Energy with a short position of PHX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACT Energy and PHX Energy.
Diversification Opportunities for ACT Energy and PHX Energy
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between ACT and PHX is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding ACT Energy Technologies 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 ACT 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 ACT Energy Technologies 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 ACT Energy i.e., ACT Energy and PHX Energy go up and down completely randomly.
Pair Corralation between ACT Energy and PHX Energy
Assuming the 90 days trading horizon ACT Energy Technologies is expected to under-perform the PHX Energy. In addition to that, ACT Energy is 1.09 times more volatile than PHX Energy Services. It trades about -0.06 of its total potential returns per unit of risk. PHX Energy Services is currently generating about 0.12 per unit of volatility. If you would invest 733.00 in PHX Energy Services on May 4, 2025 and sell it today you would earn a total of 86.00 from holding PHX Energy Services or generate 11.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ACT Energy Technologies vs. PHX Energy Services
Performance |
Timeline |
ACT Energy Technologies |
PHX Energy Services |
ACT Energy and PHX Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ACT Energy and PHX Energy
The main advantage of trading using opposite ACT Energy and PHX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACT Energy 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.ACT Energy vs. Precision Drilling | ACT Energy vs. Ensign Energy Services | ACT Energy vs. PHX Energy Services | ACT Energy vs. AKITA Drilling |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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