Correlation Between Pine Cliff and Surge Energy

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

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

Diversification Opportunities for Pine Cliff and Surge Energy

0.9

Correlation Coefficient

Pine Cliff  Surge Energy

Almost no diversification

The 3 months correlation between Pine and Surge is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Pine Cliff Energy and Surge Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surge Energy and Pine Cliff 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 Pine Cliff Energy are associated (or correlated) with Surge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surge Energy has no effect on the direction of Pine Cliff i.e., Pine Cliff and Surge Energy go up and down completely randomly.

Pair Corralation between Pine Cliff and Surge Energy

Assuming the 90 days trading horizon Pine Cliff is expected to generate 1.05 times less return on investment than Surge Energy. In addition to that, Pine Cliff is 1.61 times more volatile than Surge Energy. It trades about 0.16 of its total potential returns per unit of risk. Surge Energy is currently generating about 0.26 per unit of volatility. If you would invest  482.00  in Surge Energy on April 22, 2025 and sell it today you would earn a total of  202.00  from holding Surge Energy or generate 41.91% return on investment over 90 days.

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

Pine Cliff Energy  vs.  Surge Energy

Pine Cliff Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pine Cliff Energy are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, Pine Cliff displayed solid returns over the last few months and may actually be approaching a breakup point.

Surge Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Surge Energy are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Surge Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pine Cliff and Surge Energy

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

The idea behind Pine Cliff Energy and Surge 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.