Correlation Between Knight Therapeutics and Suncor Energy
Can any of the company-specific risk be diversified away by investing in both Knight Therapeutics and Suncor 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 Knight Therapeutics and Suncor Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knight Therapeutics and Suncor Energy, you can compare the effects of market volatilities on Knight Therapeutics and Suncor 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 Knight Therapeutics with a short position of Suncor Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knight Therapeutics and Suncor Energy.
Diversification Opportunities for Knight Therapeutics and Suncor Energy
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Knight and Suncor is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Knight Therapeutics and Suncor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suncor Energy and Knight Therapeutics 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 Knight Therapeutics are associated (or correlated) with Suncor Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suncor Energy has no effect on the direction of Knight Therapeutics i.e., Knight Therapeutics and Suncor Energy go up and down completely randomly.
Pair Corralation between Knight Therapeutics and Suncor Energy
Assuming the 90 days trading horizon Knight Therapeutics is expected to generate 6.78 times less return on investment than Suncor Energy. But when comparing it to its historical volatility, Knight Therapeutics is 1.07 times less risky than Suncor Energy. It trades about 0.01 of its potential returns per unit of risk. Suncor Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,005 in Suncor Energy on September 13, 2024 and sell it today you would earn a total of 1,287 from holding Suncor Energy or generate 32.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knight Therapeutics vs. Suncor Energy
Performance |
| Timeline |
| Knight Therapeutics |
| Suncor Energy |
Knight Therapeutics and Suncor Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knight Therapeutics and Suncor Energy
The main advantage of trading using opposite Knight Therapeutics and Suncor Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knight Therapeutics position performs unexpectedly, Suncor 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 Suncor Energy will offset losses from the drop in Suncor Energy's long position.| Knight Therapeutics vs. Stella Jones | Knight Therapeutics vs. Richelieu Hardware | Knight Therapeutics vs. Element Fleet Management | Knight Therapeutics vs. ECN Capital Corp |
| Suncor Energy vs. Enbridge | Suncor Energy vs. Canadian Natural Resources | Suncor Energy vs. Toronto Dominion Bank | Suncor Energy vs. Bank of Nova |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |