Correlation Between Enbridge Pref and Cenovus Energy
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By analyzing existing cross correlation between Enbridge Pref 5 and Cenovus Energy, you can compare the effects of market volatilities on Enbridge Pref 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 Enbridge Pref with a short position of Cenovus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Cenovus Energy.
Diversification Opportunities for Enbridge Pref and Cenovus Energy
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enbridge and Cenovus is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref 5 and Cenovus Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenovus Energy and Enbridge Pref 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 Enbridge Pref 5 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 Enbridge Pref i.e., Enbridge Pref and Cenovus Energy go up and down completely randomly.
Pair Corralation between Enbridge Pref and Cenovus Energy
Assuming the 90 days trading horizon Enbridge Pref 5 is expected to generate 0.19 times more return on investment than Cenovus Energy. However, Enbridge Pref 5 is 5.32 times less risky than Cenovus Energy. It trades about -0.04 of its potential returns per unit of risk. Cenovus Energy is currently generating about -0.12 per unit of risk. If you would invest 2,395 in Enbridge Pref 5 on September 25, 2024 and sell it today you would lose (5.00) from holding Enbridge Pref 5 or give up 0.21% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 90.91% |
Values | Daily Returns |
Enbridge Pref 5 vs. Cenovus Energy
Performance |
Timeline |
Enbridge Pref 5 |
Cenovus Energy |
Enbridge Pref and Cenovus Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enbridge Pref and Cenovus Energy
The main advantage of trading using opposite Enbridge Pref and Cenovus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref 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.The idea behind Enbridge Pref 5 and Cenovus Energy 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.Cenovus Energy vs. Enbridge Pref 5 | Cenovus Energy vs. Enbridge Pref 11 | Cenovus Energy vs. Enbridge Pref L | Cenovus Energy vs. E Split Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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