Correlation Between Cenovus Energy and Exxon
Can any of the company-specific risk be diversified away by investing in both Cenovus Energy and Exxon 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 Exxon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cenovus Energy and Exxon Mobil Corp, you can compare the effects of market volatilities on Cenovus Energy and Exxon 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 Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenovus Energy and Exxon.
Diversification Opportunities for Cenovus Energy and Exxon
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cenovus and Exxon is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Cenovus Energy and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil Corp 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of Cenovus Energy i.e., Cenovus Energy and Exxon go up and down completely randomly.
Pair Corralation between Cenovus Energy and Exxon
Considering the 90-day investment horizon Cenovus Energy is expected to generate 7.13 times less return on investment than Exxon. In addition to that, Cenovus Energy is 1.47 times more volatile than Exxon Mobil Corp. It trades about 0.01 of its total potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.09 per unit of volatility. If you would invest 9,668 in Exxon Mobil Corp on August 25, 2024 and sell it today you would earn a total of 2,511 from holding Exxon Mobil Corp or generate 25.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cenovus Energy vs. Exxon Mobil Corp
Performance |
| Timeline |
| Cenovus Energy |
| Exxon Mobil Corp |
Cenovus Energy and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cenovus Energy and Exxon
The main advantage of trading using opposite Cenovus Energy and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenovus Energy position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon's long position.| Cenovus Energy vs. Imperial Oil | Cenovus Energy vs. Exxon Mobil Corp | Cenovus Energy vs. Chevron Corp | Cenovus Energy vs. BP PLC ADR |
| Exxon vs. Shell PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Cenovus Energy | Exxon vs. Petrleo Brasileiro SA |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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