Correlation Between PHX Energy and Ensign Energy

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

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

Diversification Opportunities for PHX Energy and Ensign Energy

0.75

Correlation Coefficient

PHX Energy  Ensign Energy

Poor diversification

The 3 months correlation between PHX and Ensign is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding PHX Energy Services and Ensign Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ensign Energy Services and PHX 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 PHX Energy Services are associated (or correlated) with Ensign Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ensign Energy Services has no effect on the direction of PHX Energy i.e., PHX Energy and Ensign Energy go up and down completely randomly.

Pair Corralation between PHX Energy and Ensign Energy

Assuming the 90 days trading horizon PHX Energy Services is expected to under-perform the Ensign Energy. But the stock apears to be less risky and, when comparing its historical volatility, PHX Energy Services is 1.46 times less risky than Ensign Energy. The stock trades about -0.03 of its potential returns per unit of risk. The Ensign Energy Services is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  196.00  in Ensign Energy Services on May 17, 2025 and sell it today you would earn a total of  9.00  from holding Ensign Energy Services or generate 4.59% return on investment over 90 days.

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

PHX Energy Services  vs.  Ensign Energy Services

PHX Energy Services

Risk-Adjusted Performance

Weakest

Over the last 90 days PHX Energy Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, PHX Energy is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Ensign Energy Services

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Ensign Energy Services are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Ensign Energy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with PHX Energy and Ensign Energy

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

The idea behind PHX Energy Services and Ensign 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.