Correlation Between Cenovus Energy and Adams Resources
Can any of the company-specific risk be diversified away by investing in both Cenovus Energy and Adams Resources 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 Cenovus Energy and Adams Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cenovus Energy and Adams Resources Energy, you can compare the effects of market volatilities on Cenovus Energy and Adams Resources 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 Cenovus Energy with a short position of Adams Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenovus Energy and Adams Resources.
Diversification Opportunities for Cenovus Energy and Adams Resources
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cenovus and Adams is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cenovus Energy and Adams Resources Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adams Resources Energy and Cenovus 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 Cenovus Energy are associated (or correlated) with Adams Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adams Resources Energy has no effect on the direction of Cenovus Energy i.e., Cenovus Energy and Adams Resources go up and down completely randomly.
Pair Corralation between Cenovus Energy and Adams Resources
Considering the 90-day investment horizon Cenovus Energy is expected to generate 0.98 times more return on investment than Adams Resources. However, Cenovus Energy is 1.03 times less risky than Adams Resources. It trades about 0.01 of its potential returns per unit of risk. Adams Resources Energy is currently generating about 0.0 per unit of risk. If you would invest 2,074 in Cenovus Energy on February 13, 2024 and sell it today you would lose (21.00) from holding Cenovus Energy or give up 1.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cenovus Energy vs. Adams Resources Energy
Performance |
| Timeline |
| Cenovus Energy |
| Adams Resources Energy |
Cenovus Energy and Adams Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cenovus Energy and Adams Resources
The main advantage of trading using opposite Cenovus Energy and Adams Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenovus Energy position performs unexpectedly, Adams Resources 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 Adams Resources will offset losses from the drop in Adams Resources' long position.| Cenovus Energy vs. Juniper Networks | Cenovus Energy vs. Catalystprinceton Floating Rate | Cenovus Energy vs. HP Inc | Cenovus Energy vs. Zebra Technologies |
| Adams Resources vs. Delek Energy | Adams Resources vs. Sunoco LP | Adams Resources vs. CVR Energy | Adams Resources vs. Phillips 66 |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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