Correlation Between Cenovus Energy and Petroleo Brasileiro
Can any of the company-specific risk be diversified away by investing in both Cenovus Energy and Petroleo Brasileiro 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 Petroleo Brasileiro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cenovus Energy and Petroleo Brasileiro Petrobras, you can compare the effects of market volatilities on Cenovus Energy and Petroleo Brasileiro 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 Petroleo Brasileiro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenovus Energy and Petroleo Brasileiro.
Diversification Opportunities for Cenovus Energy and Petroleo Brasileiro
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cenovus and Petroleo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Cenovus Energy and Petroleo Brasileiro Petrobras in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petroleo Brasileiro 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 Petroleo Brasileiro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petroleo Brasileiro has no effect on the direction of Cenovus Energy i.e., Cenovus Energy and Petroleo Brasileiro go up and down completely randomly.
Pair Corralation between Cenovus Energy and Petroleo Brasileiro
Considering the 90-day investment horizon Cenovus Energy is expected to generate 1.72 times less return on investment than Petroleo Brasileiro. But when comparing it to its historical volatility, Cenovus Energy is 1.42 times less risky than Petroleo Brasileiro. It trades about 0.27 of its potential returns per unit of risk. Petroleo Brasileiro Petrobras is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,494 in Petroleo Brasileiro Petrobras on January 25, 2024 and sell it today you would earn a total of 187.00 from holding Petroleo Brasileiro Petrobras or generate 12.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cenovus Energy vs. Petroleo Brasileiro Petrobras
Performance |
| Timeline |
| Cenovus Energy |
| Petroleo Brasileiro |
Cenovus Energy and Petroleo Brasileiro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cenovus Energy and Petroleo Brasileiro
The main advantage of trading using opposite Cenovus Energy and Petroleo Brasileiro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenovus Energy position performs unexpectedly, Petroleo Brasileiro 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 Petroleo Brasileiro will offset losses from the drop in Petroleo Brasileiro's long position.| Cenovus Energy vs. Imperial Oil | Cenovus Energy vs. Exxon Mobil Corp | Cenovus Energy vs. Chevron Corp | Cenovus Energy vs. BP PLC ADR |
| Petroleo Brasileiro vs. Ecopetrol SA ADR | Petroleo Brasileiro vs. Equinor ASA ADR | Petroleo Brasileiro vs. Eni SpA ADR | Petroleo Brasileiro vs. Cenovus Energy |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |