Correlation Between Enerflex and High Arctic

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

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

Diversification Opportunities for Enerflex and High Arctic

0.32

Correlation Coefficient

Enerflex  High Arctic

Weak diversification

The 3 months correlation between Enerflex and High is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Enerflex and High Arctic Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Arctic Energy 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 High Arctic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Arctic Energy has no effect on the direction of Enerflex i.e., Enerflex and High Arctic go up and down completely randomly.

Pair Corralation between Enerflex and High Arctic

Assuming the 90 days trading horizon Enerflex is expected to generate 0.47 times more return on investment than High Arctic. However, Enerflex is 2.14 times less risky than High Arctic. It trades about 0.2 of its potential returns per unit of risk. High Arctic Energy is currently generating about 0.04 per unit of risk. If you would invest  890.00  in Enerflex on April 22, 2025 and sell it today you would earn a total of  203.00  from holding Enerflex or generate 22.81% return on investment over 90 days.

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

Enerflex  vs.  High Arctic Energy

Enerflex

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enerflex are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Enerflex displayed solid returns over the last few months and may actually be approaching a breakup point.

High Arctic Energy

Risk-Adjusted Performance

Insignificant

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

Pair Trading with Enerflex and High Arctic

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

The idea behind Enerflex and High Arctic 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.