Correlation Between SUNCOR and NextNav Warrant
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By analyzing existing cross correlation between SUNCOR ENERGY INC and NextNav Warrant, you can compare the effects of market volatilities on SUNCOR and NextNav Warrant 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 with a short position of NextNav Warrant. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUNCOR and NextNav Warrant.
Diversification Opportunities for SUNCOR and NextNav Warrant
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SUNCOR and NextNav is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding SUNCOR ENERGY INC and NextNav Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextNav Warrant and SUNCOR 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 INC are associated (or correlated) with NextNav Warrant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextNav Warrant has no effect on the direction of SUNCOR i.e., SUNCOR and NextNav Warrant go up and down completely randomly.
Pair Corralation between SUNCOR and NextNav Warrant
Assuming the 90 days trading horizon SUNCOR ENERGY INC is expected to generate 14.14 times more return on investment than NextNav Warrant. However, SUNCOR is 14.14 times more volatile than NextNav Warrant. It trades about 0.07 of its potential returns per unit of risk. NextNav Warrant is currently generating about 0.14 per unit of risk. If you would invest 11,012 in SUNCOR ENERGY INC on August 31, 2024 and sell it today you would earn a total of 454.00 from holding SUNCOR ENERGY INC or generate 4.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 68.59% |
| Values | Daily Returns |
SUNCOR ENERGY INC vs. NextNav Warrant
Performance |
| Timeline |
| SUNCOR ENERGY INC |
| NextNav Warrant |
SUNCOR and NextNav Warrant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUNCOR and NextNav Warrant
The main advantage of trading using opposite SUNCOR and NextNav Warrant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUNCOR position performs unexpectedly, NextNav Warrant 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 NextNav Warrant will offset losses from the drop in NextNav Warrant's long position.The idea behind SUNCOR ENERGY INC and NextNav Warrant 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.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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