Correlation Between Transportadora and Cenovus Energy
Can any of the company-specific risk be diversified away by investing in both Transportadora and Cenovus 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 Transportadora and Cenovus Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transportadora de Gas and Cenovus Energy, you can compare the effects of market volatilities on Transportadora and Cenovus 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 Transportadora with a short position of Cenovus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transportadora and Cenovus Energy.
Diversification Opportunities for Transportadora and Cenovus Energy
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Transportadora and Cenovus is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Transportadora de Gas and Cenovus Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenovus Energy and Transportadora 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 Transportadora de Gas are associated (or correlated) with Cenovus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenovus Energy has no effect on the direction of Transportadora i.e., Transportadora and Cenovus Energy go up and down completely randomly.
Pair Corralation between Transportadora and Cenovus Energy
Considering the 90-day investment horizon Transportadora de Gas is expected to under-perform the Cenovus Energy. In addition to that, Transportadora is 2.44 times more volatile than Cenovus Energy. It trades about -0.15 of its total potential returns per unit of risk. Cenovus Energy is currently generating about -0.11 per unit of volatility. If you would invest 1,531 in Cenovus Energy on November 2, 2024 and sell it today you would lose (41.00) from holding Cenovus Energy or give up 2.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transportadora de Gas vs. Cenovus Energy
Performance |
| Timeline |
| Transportadora de Gas |
| Cenovus Energy |
Transportadora and Cenovus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transportadora and Cenovus Energy
The main advantage of trading using opposite Transportadora and Cenovus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transportadora position performs unexpectedly, Cenovus 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 Cenovus Energy will offset losses from the drop in Cenovus Energy's long position.| Transportadora vs. Petroleo Brasileiro Petrobras | Transportadora vs. Ecopetrol SA ADR | Transportadora vs. Petrleo Brasileiro SA | Transportadora vs. Equinor ASA ADR |
| Cenovus Energy vs. Imperial Oil | Cenovus Energy vs. Exxon Mobil Corp | Cenovus Energy vs. Chevron Corp | Cenovus Energy vs. BP PLC ADR |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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