Correlation Between Aquagold International and Cenovus Energy
Can any of the company-specific risk be diversified away by investing in both Aquagold International and Cenovus 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 Aquagold International and Cenovus Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aquagold International and Cenovus Energy, you can compare the effects of market volatilities on Aquagold International and Cenovus 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 Aquagold International with a short position of Cenovus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aquagold International and Cenovus Energy.
Diversification Opportunities for Aquagold International and Cenovus Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Aquagold and Cenovus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Cenovus Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenovus Energy and Aquagold International 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 Aquagold International are associated (or correlated) with Cenovus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenovus Energy has no effect on the direction of Aquagold International i.e., Aquagold International and Cenovus Energy go up and down completely randomly.
Pair Corralation between Aquagold International and Cenovus Energy
Given the investment horizon of 90 days Aquagold International is expected to generate 24.6 times more return on investment than Cenovus Energy. However, Aquagold International is 24.6 times more volatile than Cenovus Energy. It trades about 0.06 of its potential returns per unit of risk. Cenovus Energy is currently generating about 0.0 per unit of risk. If you would invest 25.00 in Aquagold International on September 2, 2024 and sell it today you would lose (24.40) from holding Aquagold International or give up 97.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aquagold International vs. Cenovus Energy
Performance |
| Timeline |
| Aquagold International |
| Cenovus Energy |
Aquagold International and Cenovus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aquagold International and Cenovus Energy
The main advantage of trading using opposite Aquagold International and Cenovus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aquagold International position performs unexpectedly, Cenovus 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 Cenovus Energy will offset losses from the drop in Cenovus Energy's long position.| Aquagold International vs. PepsiCo | Aquagold International vs. Coca Cola Consolidated | Aquagold International vs. Monster Beverage Corp | Aquagold International vs. Celsius Holdings |
| Cenovus Energy vs. Imperial Oil | Cenovus Energy vs. Exxon Mobil Corp | Cenovus Energy vs. Chevron Corp | Cenovus Energy vs. BP PLC ADR |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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