Correlation Between Cenovus Energy and Vivakor
Can any of the company-specific risk be diversified away by investing in both Cenovus Energy and Vivakor 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 Vivakor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cenovus Energy and Vivakor, you can compare the effects of market volatilities on Cenovus Energy and Vivakor 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 Vivakor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenovus Energy and Vivakor.
Diversification Opportunities for Cenovus Energy and Vivakor
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Cenovus and Vivakor is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Cenovus Energy and Vivakor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivakor 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 Vivakor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivakor has no effect on the direction of Cenovus Energy i.e., Cenovus Energy and Vivakor go up and down completely randomly.
Pair Corralation between Cenovus Energy and Vivakor
Considering the 90-day investment horizon Cenovus Energy is expected to generate 106.25 times less return on investment than Vivakor. But when comparing it to its historical volatility, Cenovus Energy is 3.76 times less risky than Vivakor. It trades about 0.0 of its potential returns per unit of risk. Vivakor is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 115.00 in Vivakor on August 31, 2024 and sell it today you would earn a total of 40.00 from holding Vivakor or generate 34.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cenovus Energy vs. Vivakor
Performance |
| Timeline |
| Cenovus Energy |
| Vivakor |
Cenovus Energy and Vivakor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cenovus Energy and Vivakor
The main advantage of trading using opposite Cenovus Energy and Vivakor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenovus Energy position performs unexpectedly, Vivakor 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 Vivakor will offset losses from the drop in Vivakor's long position.| Cenovus Energy vs. RLJ Lodging Trust | Cenovus Energy vs. Aquagold International | Cenovus Energy vs. Stepstone Group | Cenovus Energy vs. Morningstar Unconstrained Allocation |
| Vivakor vs. Houston American Energy | Vivakor vs. Barnwell Industries | Vivakor vs. Mexco Energy | Vivakor vs. PHX Minerals |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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