Correlation Between Suncor Energy and Shell PLC
Can any of the company-specific risk be diversified away by investing in both Suncor Energy and Shell PLC 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 Shell PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suncor Energy and Shell PLC ADR, you can compare the effects of market volatilities on Suncor Energy and Shell PLC 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 Shell PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suncor Energy and Shell PLC.
Diversification Opportunities for Suncor Energy and Shell PLC
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Suncor and Shell is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Suncor Energy and Shell PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shell PLC ADR 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 Shell PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shell PLC ADR has no effect on the direction of Suncor Energy i.e., Suncor Energy and Shell PLC go up and down completely randomly.
Pair Corralation between Suncor Energy and Shell PLC
Allowing for the 90-day total investment horizon Suncor Energy is expected to generate 1.35 times more return on investment than Shell PLC. However, Suncor Energy is 1.35 times more volatile than Shell PLC ADR. It trades about 0.12 of its potential returns per unit of risk. Shell PLC ADR is currently generating about 0.02 per unit of risk. If you would invest 3,807 in Suncor Energy on August 30, 2024 and sell it today you would earn a total of 148.00 from holding Suncor Energy or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suncor Energy vs. Shell PLC ADR
Performance |
| Timeline |
| Suncor Energy |
| Shell PLC ADR |
Suncor Energy and Shell PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suncor Energy and Shell PLC
The main advantage of trading using opposite Suncor Energy and Shell PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suncor Energy position performs unexpectedly, Shell PLC 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 Shell PLC will offset losses from the drop in Shell PLC's long position.| Suncor Energy vs. Imperial Oil | Suncor Energy vs. Ecopetrol SA ADR | Suncor Energy vs. Petroleo Brasileiro Petrobras | Suncor Energy vs. Equinor ASA ADR |
| Shell PLC vs. Exxon Mobil Corp | Shell PLC vs. Chevron Corp | Shell PLC vs. TotalEnergies SE ADR | Shell PLC vs. Petroleo Brasileiro Petrobras |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |