Correlation Between DIRTT Environmental and Cenovus Energy
Can any of the company-specific risk be diversified away by investing in both DIRTT Environmental 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 DIRTT Environmental and Cenovus Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DIRTT Environmental Solutions and Cenovus Energy, you can compare the effects of market volatilities on DIRTT Environmental 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 DIRTT Environmental with a short position of Cenovus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of DIRTT Environmental and Cenovus Energy.
Diversification Opportunities for DIRTT Environmental and Cenovus Energy
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DIRTT and Cenovus is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding DIRTT Environmental Solutions and Cenovus Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenovus Energy and DIRTT Environmental 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 DIRTT Environmental Solutions 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 DIRTT Environmental i.e., DIRTT Environmental and Cenovus Energy go up and down completely randomly.
Pair Corralation between DIRTT Environmental and Cenovus Energy
Assuming the 90 days trading horizon DIRTT Environmental Solutions is expected to under-perform the Cenovus Energy. In addition to that, DIRTT Environmental is 3.87 times more volatile than Cenovus Energy. It trades about -0.06 of its total potential returns per unit of risk. Cenovus Energy is currently generating about -0.16 per unit of volatility. If you would invest 2,223 in Cenovus Energy on September 18, 2024 and sell it today you would lose (110.00) from holding Cenovus Energy or give up 4.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DIRTT Environmental Solutions vs. Cenovus Energy
Performance |
| Timeline |
| DIRTT Environmental |
| Cenovus Energy |
DIRTT Environmental and Cenovus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DIRTT Environmental and Cenovus Energy
The main advantage of trading using opposite DIRTT Environmental and Cenovus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIRTT Environmental 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.| DIRTT Environmental vs. Knight Therapeutics | DIRTT Environmental vs. Element Fleet Management | DIRTT Environmental vs. Autocanada | DIRTT Environmental vs. Bird Construction |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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