Correlation Between Cenovus Energy and Calvert Floating-rate
Can any of the company-specific risk be diversified away by investing in both Cenovus Energy and Calvert Floating-rate 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 Calvert Floating-rate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cenovus Energy and Calvert Floating Rate Advantage, you can compare the effects of market volatilities on Cenovus Energy and Calvert Floating-rate 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 Calvert Floating-rate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenovus Energy and Calvert Floating-rate.
Diversification Opportunities for Cenovus Energy and Calvert Floating-rate
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cenovus and Calvert is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Cenovus Energy and Calvert Floating Rate Advantag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Floating Rate 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 Calvert Floating-rate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Floating Rate has no effect on the direction of Cenovus Energy i.e., Cenovus Energy and Calvert Floating-rate go up and down completely randomly.
Pair Corralation between Cenovus Energy and Calvert Floating-rate
Considering the 90-day investment horizon Cenovus Energy is expected to generate 16.78 times more return on investment than Calvert Floating-rate. However, Cenovus Energy is 16.78 times more volatile than Calvert Floating Rate Advantage. It trades about 0.19 of its potential returns per unit of risk. Calvert Floating Rate Advantage is currently generating about 0.31 per unit of risk. If you would invest 1,185 in Cenovus Energy on May 1, 2025 and sell it today you would earn a total of 322.00 from holding Cenovus Energy or generate 27.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.39% |
| Values | Daily Returns |
Cenovus Energy vs. Calvert Floating Rate Advantag
Performance |
| Timeline |
| Cenovus Energy |
| Calvert Floating Rate |
Cenovus Energy and Calvert Floating-rate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cenovus Energy and Calvert Floating-rate
The main advantage of trading using opposite Cenovus Energy and Calvert Floating-rate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenovus Energy position performs unexpectedly, Calvert Floating-rate 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 Calvert Floating-rate will offset losses from the drop in Calvert Floating-rate'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 |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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