Correlation Between Trican Well and Secure Energy

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

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

Diversification Opportunities for Trican Well and Secure Energy

0.79

Correlation Coefficient

Trican Well  Secure Energy

Poor diversification

The 3 months correlation between Trican and Secure is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Trican Well Service and Secure Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secure Energy Services and Trican Well 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 Trican Well Service are associated (or correlated) with Secure Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secure Energy Services has no effect on the direction of Trican Well i.e., Trican Well and Secure Energy go up and down completely randomly.

Pair Corralation between Trican Well and Secure Energy

Assuming the 90 days trading horizon Trican Well Service is expected to generate 1.26 times more return on investment than Secure Energy. However, Trican Well is 1.26 times more volatile than Secure Energy Services. It trades about 0.23 of its potential returns per unit of risk. Secure Energy Services is currently generating about 0.18 per unit of risk. If you would invest  405.00  in Trican Well Service on April 24, 2025 and sell it today you would earn a total of  156.00  from holding Trican Well Service or generate 38.52% return on investment over 90 days.

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

Trican Well Service  vs.  Secure Energy Services

Trican Well Service

Risk-Adjusted Performance

Solid

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

Secure Energy Services

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Secure Energy Services are ranked lower than 13 (%) 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.

Pair Trading with Trican Well and Secure Energy

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

The idea behind Trican Well Service and Secure Energy Services 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.