Correlation Between Suncor Energy and TotalEnergies

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Can any of the company-specific risk be diversified away by investing in both Suncor Energy and TotalEnergies 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 TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suncor Energy and TotalEnergies SE ADR, you can compare the effects of market volatilities on Suncor Energy and TotalEnergies 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 TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suncor Energy and TotalEnergies.

Diversification Opportunities for Suncor Energy and TotalEnergies

SuncorTotalEnergiesDiversified AwaySuncorTotalEnergiesDiversified Away100%
0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Suncor and TotalEnergies is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Suncor Energy and TotalEnergies SE ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE 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 TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies SE ADR has no effect on the direction of Suncor Energy i.e., Suncor Energy and TotalEnergies go up and down completely randomly.

Pair Corralation between Suncor Energy and TotalEnergies

Allowing for the 90-day total investment horizon Suncor Energy is expected to generate 1.26 times more return on investment than TotalEnergies. However, Suncor Energy is 1.26 times more volatile than TotalEnergies SE ADR. It trades about 0.04 of its potential returns per unit of risk. TotalEnergies SE ADR is currently generating about -0.01 per unit of risk. If you would invest  3,532  in Suncor Energy on November 21, 2024 and sell it today you would earn a total of  424.00  from holding Suncor Energy or generate 12.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Suncor Energy  vs.  TotalEnergies SE ADR

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-505
JavaScript chart by amCharts 3.21.15SU TTE
       Timeline  
Suncor Energy 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Suncor Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Suncor Energy is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3435363738394041
TotalEnergies SE ADR 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in TotalEnergies SE ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, TotalEnergies is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb5456586062

Suncor Energy and TotalEnergies Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.79-3.59-2.39-1.180.02031.22.423.644.86 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15SU TTE
       Returns  

Pair Trading with Suncor Energy and TotalEnergies

The main advantage of trading using opposite Suncor Energy and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suncor Energy position performs unexpectedly, TotalEnergies 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 TotalEnergies will offset losses from the drop in TotalEnergies' long position.
The idea behind Suncor Energy and TotalEnergies SE ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

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