Correlation Between Calfrac Well and Birchcliff Energy

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

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

Diversification Opportunities for Calfrac Well and Birchcliff Energy

0.17

Correlation Coefficient

Calfrac Well  Birchcliff Energy

Average diversification

The 3 months correlation between Calfrac and Birchcliff is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Calfrac Well Services and Birchcliff Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Birchcliff Energy and Calfrac Well 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 Calfrac Well Services are associated (or correlated) with Birchcliff Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Birchcliff Energy has no effect on the direction of Calfrac Well i.e., Calfrac Well and Birchcliff Energy go up and down completely randomly.

Pair Corralation between Calfrac Well and Birchcliff Energy

Assuming the 90 days trading horizon Calfrac Well Services is expected to generate 1.27 times more return on investment than Birchcliff Energy. However, Calfrac Well is 1.27 times more volatile than Birchcliff Energy. It trades about 0.12 of its potential returns per unit of risk. Birchcliff Energy is currently generating about 0.13 per unit of risk. If you would invest  335.00  in Calfrac Well Services on May 6, 2025 and sell it today you would earn a total of  53.00  from holding Calfrac Well Services or generate 15.82% return on investment over 90 days.

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

Calfrac Well Services  vs.  Birchcliff Energy

Calfrac Well Services

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calfrac Well Services are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Calfrac Well displayed solid returns over the last few months and may actually be approaching a breakup point.

Birchcliff Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Birchcliff Energy are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Birchcliff Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calfrac Well and Birchcliff Energy

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

The idea behind Calfrac Well Services and Birchcliff Energy 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.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..