Correlation Between Secure Energy and Kelt Exploration

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

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

Diversification Opportunities for Secure Energy and Kelt Exploration

0.96

Correlation Coefficient

Secure Energy  Kelt Exploration

Almost no diversification

The 3 months correlation between Secure and Kelt is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Secure Energy Services and Kelt Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelt Exploration and Secure 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 Secure Energy Services are associated (or correlated) with Kelt Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelt Exploration has no effect on the direction of Secure Energy i.e., Secure Energy and Kelt Exploration go up and down completely randomly.

Pair Corralation between Secure Energy and Kelt Exploration

Assuming the 90 days trading horizon Secure Energy is expected to generate 1.07 times less return on investment than Kelt Exploration. But when comparing it to its historical volatility, Secure Energy Services is 1.01 times less risky than Kelt Exploration. It trades about 0.22 of its potential returns per unit of risk. Kelt Exploration is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  572.00  in Kelt Exploration on April 23, 2025 and sell it today you would earn a total of  184.00  from holding Kelt Exploration or generate 32.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

Secure Energy Services  vs.  Kelt Exploration

Secure Energy Services

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Secure Energy Services are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Secure Energy displayed solid returns over the last few months and may actually be approaching a breakup point.

Kelt Exploration

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kelt Exploration are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Kelt Exploration displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Secure Energy and Kelt Exploration

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

The idea behind Secure Energy Services and Kelt Exploration 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 Stocks Directory module to find actively traded stocks across global markets.