Correlation Between Enerflex and Bristow

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

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

Diversification Opportunities for Enerflex and Bristow

-0.01

Correlation Coefficient

Enerflex  Bristow

Good diversification

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

Pair Corralation between Enerflex and Bristow

Given the investment horizon of 90 days Enerflex is expected to generate 0.97 times more return on investment than Bristow. However, Enerflex is 1.03 times less risky than Bristow. It trades about 0.47 of its potential returns per unit of risk. Bristow Group is currently generating about 0.05 per unit of risk. If you would invest  576.00  in Enerflex on August 21, 2024 and sell it today you would earn a total of  302.00  from holding Enerflex or generate 52.43% return on investment over 90 days.

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

Enerflex  vs.  Bristow Group

Enerflex

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Enerflex are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Enerflex unveiled solid returns over the last few months and may actually be approaching a breakup point.

Bristow Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bristow Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Bristow is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Enerflex and Bristow

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

The idea behind Enerflex and Bristow Group 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.