Correlation Between Cenovus Energy and AFROMEDIA PLC

Can any of the company-specific risk be diversified away by investing in both Cenovus Energy and AFROMEDIA PLC 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 AFROMEDIA PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cenovus Energy and AFROMEDIA PLC, you can compare the effects of market volatilities on Cenovus Energy and AFROMEDIA PLC 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 AFROMEDIA PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cenovus Energy and AFROMEDIA PLC.

Diversification Opportunities for Cenovus Energy and AFROMEDIA PLC

0.0

Correlation Coefficient

Cenovus Energy  AFROMEDIA PLC

Pay attention - limited upside

The 3 months correlation between Cenovus and AFROMEDIA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cenovus Energy and AFROMEDIA PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFROMEDIA PLC 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 AFROMEDIA PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFROMEDIA PLC has no effect on the direction of Cenovus Energy i.e., Cenovus Energy and AFROMEDIA PLC go up and down completely randomly.

Pair Corralation between Cenovus Energy and AFROMEDIA PLC

If you would invest  1,154  in Cenovus Energy on May 3, 2025 and sell it today you would earn a total of  329.00  from holding Cenovus Energy or generate 28.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Cenovus Energy  vs.  AFROMEDIA PLC

Cenovus Energy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cenovus Energy are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Cenovus Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

AFROMEDIA PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days AFROMEDIA PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, AFROMEDIA PLC is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Cenovus Energy and AFROMEDIA PLC

The main advantage of trading using opposite Cenovus Energy and AFROMEDIA PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cenovus Energy position performs unexpectedly, AFROMEDIA PLC 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 AFROMEDIA PLC will offset losses from the drop in AFROMEDIA PLC's long position.

The idea behind Cenovus Energy and AFROMEDIA PLC 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.

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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..