Correlation Between Surge Energy and Crew Energy

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

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

Diversification Opportunities for Surge Energy and Crew Energy

0.0

Correlation Coefficient

Surge Energy  Crew Energy

Pay attention - limited upside

The 3 months correlation between Surge and Crew is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Surge Energy and Crew Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crew Energy and Surge 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 Surge Energy are associated (or correlated) with Crew Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crew Energy has no effect on the direction of Surge Energy i.e., Surge Energy and Crew Energy go up and down completely randomly.

Pair Corralation between Surge Energy and Crew Energy

If you would invest (100.00) in Surge Energy on February 8, 2024 and sell it today you would earn a total of  100.00  from holding Surge Energy or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Surge Energy  vs.  Crew Energy

Surge Energy

Risk-Adjusted Performance

0 of 100

OK

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

Crew Energy

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Crew Energy are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Crew Energy may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Surge Energy and Crew Energy

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

The idea behind Surge Energy and Crew Energy 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.

Check out your portfolio center.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.