Correlation Between Helios Fairfax and Source Energy

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

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

Diversification Opportunities for Helios Fairfax and Source Energy

-0.63

Correlation Coefficient

Helios Fairfax  Source Energy

Excellent diversification

The 3 months correlation between Helios and Source is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Helios Fairfax Partners and Source Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Source Energy Services and Helios Fairfax 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 Helios Fairfax Partners are associated (or correlated) with Source Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Source Energy Services has no effect on the direction of Helios Fairfax i.e., Helios Fairfax and Source Energy go up and down completely randomly.

Pair Corralation between Helios Fairfax and Source Energy

Assuming the 90 days trading horizon Helios Fairfax Partners is expected to under-perform the Source Energy. But the stock apears to be less risky and, when comparing its historical volatility, Helios Fairfax Partners is 1.21 times less risky than Source Energy. The stock trades about -0.17 of its potential returns per unit of risk. The Source Energy Services is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,153  in Source Energy Services on May 18, 2025 and sell it today you would earn a total of  111.00  from holding Source Energy Services or generate 9.63% return on investment over 90 days.

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

Helios Fairfax Partners  vs.  Source Energy Services

Helios Fairfax Partners

Risk-Adjusted Performance

Weakest

Over the last 90 days Helios Fairfax Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Source Energy Services

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Source Energy Services are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Source Energy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Helios Fairfax and Source Energy

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

The idea behind Helios Fairfax Partners and Source Energy 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.