Correlation Between TotalEnergies and Suncor Energy
Can any of the company-specific risk be diversified away by investing in both TotalEnergies and Suncor 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 TotalEnergies and Suncor Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TotalEnergies SE ADR and Suncor Energy, you can compare the effects of market volatilities on TotalEnergies and Suncor 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 TotalEnergies with a short position of Suncor Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of TotalEnergies and Suncor Energy.
Diversification Opportunities for TotalEnergies and Suncor Energy
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TotalEnergies and Suncor is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding TotalEnergies SE ADR and Suncor Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suncor Energy and TotalEnergies 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 TotalEnergies SE ADR are associated (or correlated) with Suncor Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suncor Energy has no effect on the direction of TotalEnergies i.e., TotalEnergies and Suncor Energy go up and down completely randomly.
Pair Corralation between TotalEnergies and Suncor Energy
Considering the 90-day investment horizon TotalEnergies is expected to generate 4.7 times less return on investment than Suncor Energy. But when comparing it to its historical volatility, TotalEnergies SE ADR is 1.31 times less risky than Suncor Energy. It trades about 0.02 of its potential returns per unit of risk. Suncor Energy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,862 in Suncor Energy on August 31, 2024 and sell it today you would earn a total of 1,086 from holding Suncor Energy or generate 37.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TotalEnergies SE ADR vs. Suncor Energy
Performance |
| Timeline |
| TotalEnergies SE ADR |
| Suncor Energy |
TotalEnergies and Suncor Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TotalEnergies and Suncor Energy
The main advantage of trading using opposite TotalEnergies and Suncor Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TotalEnergies position performs unexpectedly, Suncor 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 Suncor Energy will offset losses from the drop in Suncor Energy's long position.| TotalEnergies vs. RLJ Lodging Trust | TotalEnergies vs. Aquagold International | TotalEnergies vs. Stepstone Group | TotalEnergies vs. Morningstar Unconstrained Allocation |
| Suncor Energy vs. RLJ Lodging Trust | Suncor Energy vs. Aquagold International | Suncor Energy vs. Stepstone Group | Suncor Energy vs. Morningstar Unconstrained Allocation |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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