Correlation Between Ensign Energy and Calfrac Well

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

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

Diversification Opportunities for Ensign Energy and Calfrac Well

0.4

Correlation Coefficient

Ensign Energy  Calfrac Well

Very weak diversification

The 3 months correlation between Ensign and Calfrac is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ensign Energy Services and Calfrac Well Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calfrac Well Services and Ensign 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 Ensign Energy Services are associated (or correlated) with Calfrac Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calfrac Well Services has no effect on the direction of Ensign Energy i.e., Ensign Energy and Calfrac Well go up and down completely randomly.

Pair Corralation between Ensign Energy and Calfrac Well

Assuming the 90 days trading horizon Ensign Energy Services is expected to generate 1.26 times more return on investment than Calfrac Well. However, Ensign Energy is 1.26 times more volatile than Calfrac Well Services. It trades about 0.12 of its potential returns per unit of risk. Calfrac Well Services is currently generating about 0.12 per unit of risk. If you would invest  183.00  in Ensign Energy Services on May 6, 2025 and sell it today you would earn a total of  36.00  from holding Ensign Energy Services or generate 19.67% return on investment over 90 days.

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

Ensign Energy Services  vs.  Calfrac Well Services

Ensign Energy Services

Risk-Adjusted Performance

OK

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

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.

Pair Trading with Ensign Energy and Calfrac Well

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

The idea behind Ensign Energy Services and Calfrac Well Services 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.