Correlation Between Suncor Energy and Brighthouse Financial
Can any of the company-specific risk be diversified away by investing in both Suncor Energy and Brighthouse Financial 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 Brighthouse Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suncor Energy and Brighthouse Financial, you can compare the effects of market volatilities on Suncor Energy and Brighthouse Financial 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 Brighthouse Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suncor Energy and Brighthouse Financial.
Diversification Opportunities for Suncor Energy and Brighthouse Financial
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Suncor and Brighthouse is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Suncor Energy and Brighthouse Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brighthouse Financial 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 Brighthouse Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brighthouse Financial has no effect on the direction of Suncor Energy i.e., Suncor Energy and Brighthouse Financial go up and down completely randomly.
Pair Corralation between Suncor Energy and Brighthouse Financial
Allowing for the 90-day total investment horizon Suncor Energy is expected to generate 2.11 times more return on investment than Brighthouse Financial. However, Suncor Energy is 2.11 times more volatile than Brighthouse Financial. It trades about 0.12 of its potential returns per unit of risk. Brighthouse Financial is currently generating about -0.08 per unit of risk. If you would invest 3,809 in Suncor Energy on August 31, 2024 and sell it today you would earn a total of 146.00 from holding Suncor Energy or generate 3.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suncor Energy vs. Brighthouse Financial
Performance |
| Timeline |
| Suncor Energy |
| Brighthouse Financial |
Suncor Energy and Brighthouse Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suncor Energy and Brighthouse Financial
The main advantage of trading using opposite Suncor Energy and Brighthouse Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suncor Energy position performs unexpectedly, Brighthouse Financial 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 Brighthouse Financial will offset losses from the drop in Brighthouse Financial's long position.| Suncor Energy vs. RLJ Lodging Trust | Suncor Energy vs. Aquagold International | Suncor Energy vs. Stepstone Group | Suncor Energy vs. Morningstar Unconstrained Allocation |
| Brighthouse Financial vs. Brighthouse Financial | Brighthouse Financial vs. Unum Group | Brighthouse Financial vs. Argo Group 65 | Brighthouse Financial vs. Arch Capital Group |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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