Correlation Between Cenovus Energy and Pet Valu
Can any of the company-specific risk be diversified away by investing in both Cenovus Energy and Pet Valu 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 Cenovus Energy and Pet Valu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cenovus Energy and Pet Valu Holdings, you can compare the effects of market volatilities on Cenovus Energy and Pet Valu 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 Cenovus Energy with a short position of Pet Valu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenovus Energy and Pet Valu.
Diversification Opportunities for Cenovus Energy and Pet Valu
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cenovus and Pet is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cenovus Energy and Pet Valu Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pet Valu Holdings and Cenovus 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 Cenovus Energy are associated (or correlated) with Pet Valu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pet Valu Holdings has no effect on the direction of Cenovus Energy i.e., Cenovus Energy and Pet Valu go up and down completely randomly.
Pair Corralation between Cenovus Energy and Pet Valu
Assuming the 90 days trading horizon Cenovus Energy is expected to generate 1.3 times more return on investment than Pet Valu. However, Cenovus Energy is 1.3 times more volatile than Pet Valu Holdings. It trades about 0.0 of its potential returns per unit of risk. Pet Valu Holdings is currently generating about -0.04 per unit of risk. If you would invest 2,364 in Cenovus Energy on September 3, 2024 and sell it today you would lose (146.00) from holding Cenovus Energy or give up 6.18% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Cenovus Energy vs. Pet Valu Holdings
Performance |
Timeline |
Cenovus Energy |
Pet Valu Holdings |
Cenovus Energy and Pet Valu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cenovus Energy and Pet Valu
The main advantage of trading using opposite Cenovus Energy and Pet Valu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenovus Energy position performs unexpectedly, Pet Valu 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 Pet Valu will offset losses from the drop in Pet Valu's long position.Cenovus Energy vs. Canadian Natural Resources | Cenovus Energy vs. Suncor Energy | Cenovus Energy vs. MEG Energy Corp | Cenovus Energy vs. Baytex Energy Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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