Correlation Between Enerflex and Headwater Exploration
Can any of the company-specific risk be diversified away by investing in both Enerflex and Headwater Exploration 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 Headwater Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enerflex and Headwater Exploration, you can compare the effects of market volatilities on Enerflex and Headwater Exploration 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 Headwater Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enerflex and Headwater Exploration.
Diversification Opportunities for Enerflex and Headwater Exploration
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Enerflex and Headwater is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Enerflex and Headwater Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Headwater Exploration 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 Headwater Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Headwater Exploration has no effect on the direction of Enerflex i.e., Enerflex and Headwater Exploration go up and down completely randomly.
Pair Corralation between Enerflex and Headwater Exploration
Assuming the 90 days trading horizon Enerflex is expected to generate 1.28 times more return on investment than Headwater Exploration. However, Enerflex is 1.28 times more volatile than Headwater Exploration. It trades about 0.3 of its potential returns per unit of risk. Headwater Exploration is currently generating about 0.02 per unit of risk. If you would invest 1,115 in Enerflex on July 26, 2025 and sell it today you would earn a total of 571.00 from holding Enerflex or generate 51.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Enerflex vs. Headwater Exploration
Performance |
| Timeline |
| Enerflex |
| Headwater Exploration |
Enerflex and Headwater Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enerflex and Headwater Exploration
The main advantage of trading using opposite Enerflex and Headwater Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enerflex position performs unexpectedly, Headwater Exploration 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 Headwater Exploration will offset losses from the drop in Headwater Exploration's long position.| Enerflex vs. CES Energy Solutions | Enerflex vs. Parex Resources | Enerflex vs. Headwater Exploration | Enerflex vs. Advantage Oil Gas |
| Headwater Exploration vs. Parex Resources | Headwater Exploration vs. Vermilion Energy | Headwater Exploration vs. Birchcliff Energy | Headwater Exploration vs. Enerflex |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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