Correlation Between Suncor Energy and InPlay Oil
Can any of the company-specific risk be diversified away by investing in both Suncor Energy and InPlay Oil 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 Suncor Energy and InPlay Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suncor Energy and InPlay Oil Corp, you can compare the effects of market volatilities on Suncor Energy and InPlay Oil 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 Suncor Energy with a short position of InPlay Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suncor Energy and InPlay Oil.
Diversification Opportunities for Suncor Energy and InPlay Oil
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Suncor and InPlay is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Suncor Energy and InPlay Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InPlay Oil Corp and Suncor 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 Suncor Energy are associated (or correlated) with InPlay Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InPlay Oil Corp has no effect on the direction of Suncor Energy i.e., Suncor Energy and InPlay Oil go up and down completely randomly.
Pair Corralation between Suncor Energy and InPlay Oil
Assuming the 90 days horizon Suncor Energy is expected to generate 2.59 times less return on investment than InPlay Oil. But when comparing it to its historical volatility, Suncor Energy is 2.03 times less risky than InPlay Oil. It trades about 0.01 of its potential returns per unit of risk. InPlay Oil Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 166.00 in InPlay Oil Corp on November 27, 2024 and sell it today you would earn a total of 0.00 from holding InPlay Oil Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suncor Energy vs. InPlay Oil Corp
Performance |
| Timeline |
| Suncor Energy |
| InPlay Oil Corp |
Suncor Energy and InPlay Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suncor Energy and InPlay Oil
The main advantage of trading using opposite Suncor Energy and InPlay Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suncor Energy position performs unexpectedly, InPlay Oil 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 InPlay Oil will offset losses from the drop in InPlay Oil's long position.| Suncor Energy vs. Enbridge | Suncor Energy vs. Canadian Natural Resources | Suncor Energy vs. Toronto Dominion Bank | Suncor Energy vs. Bank of Nova |
| InPlay Oil vs. Journey Energy | InPlay Oil vs. Yangarra Resources | InPlay Oil vs. Obsidian Energy | InPlay Oil vs. Pine Cliff Energy |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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