Correlation Between Cenovus Energy and Stabilis Solutions
Can any of the company-specific risk be diversified away by investing in both Cenovus Energy and Stabilis Solutions 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 Stabilis Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cenovus Energy and Stabilis Solutions, you can compare the effects of market volatilities on Cenovus Energy and Stabilis Solutions 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 Stabilis Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenovus Energy and Stabilis Solutions.
Diversification Opportunities for Cenovus Energy and Stabilis Solutions
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cenovus and Stabilis is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Cenovus Energy and Stabilis Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stabilis Solutions 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 Stabilis Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stabilis Solutions has no effect on the direction of Cenovus Energy i.e., Cenovus Energy and Stabilis Solutions go up and down completely randomly.
Pair Corralation between Cenovus Energy and Stabilis Solutions
Considering the 90-day investment horizon Cenovus Energy is expected to under-perform the Stabilis Solutions. But the stock apears to be less risky and, when comparing its historical volatility, Cenovus Energy is 1.81 times less risky than Stabilis Solutions. The stock trades about 0.0 of its potential returns per unit of risk. The Stabilis Solutions is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 463.00 in Stabilis Solutions on August 27, 2024 and sell it today you would earn a total of 40.00 from holding Stabilis Solutions or generate 8.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cenovus Energy vs. Stabilis Solutions
Performance |
| Timeline |
| Cenovus Energy |
| Stabilis Solutions |
Cenovus Energy and Stabilis Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cenovus Energy and Stabilis Solutions
The main advantage of trading using opposite Cenovus Energy and Stabilis Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenovus Energy position performs unexpectedly, Stabilis Solutions 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 Stabilis Solutions will offset losses from the drop in Stabilis Solutions' long position.The idea behind Cenovus Energy and Stabilis Solutions 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.| Stabilis Solutions vs. Equinor ASA ADR | Stabilis Solutions vs. TotalEnergies SE ADR | Stabilis Solutions vs. Ecopetrol SA ADR | Stabilis Solutions vs. National Fuel Gas |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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