Correlation Between Enerflex and Helix Energy

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

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

Diversification Opportunities for Enerflex and Helix Energy

0.27

Correlation Coefficient

Enerflex  Helix Energy

Modest diversification

The 3 months correlation between Enerflex and Helix is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Enerflex and Helix Energy Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Helix Energy Solutions 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 Helix Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Helix Energy Solutions has no effect on the direction of Enerflex i.e., Enerflex and Helix Energy go up and down completely randomly.

Pair Corralation between Enerflex and Helix Energy

Given the investment horizon of 90 days Enerflex is expected to generate 0.86 times more return on investment than Helix Energy. However, Enerflex is 1.16 times less risky than Helix Energy. It trades about 0.34 of its potential returns per unit of risk. Helix Energy Solutions is currently generating about -0.01 per unit of risk. If you would invest  585.00  in Enerflex on August 30, 2024 and sell it today you would earn a total of  336.00  from holding Enerflex or generate 57.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Enerflex  vs.  Helix Energy Solutions

Enerflex

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Enerflex are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Enerflex unveiled solid returns over the last few months and may actually be approaching a breakup point.

Helix Energy Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Helix Energy Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, Helix Energy is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Enerflex and Helix Energy

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

The idea behind Enerflex and Helix Energy Solutions 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 CEOs Directory module to screen CEOs from public companies around the world.