Correlation Between Canadian Natural and Total Gabon

Can any of the company-specific risk be diversified away by investing in both Canadian Natural and Total Gabon 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 Canadian Natural and Total Gabon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Canadian Natural Resources and Total Gabon, you can compare the effects of market volatilities on Canadian Natural and Total Gabon 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 Canadian Natural with a short position of Total Gabon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canadian Natural and Total Gabon.

Diversification Opportunities for Canadian Natural and Total Gabon

0.63

Correlation Coefficient

Canadian Natural  Total Gabon

Poor diversification

The 3 months correlation between Canadian and Total is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Natural Resources and Total Gabon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Gabon and Canadian Natural 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 Canadian Natural Resources are associated (or correlated) with Total Gabon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Gabon has no effect on the direction of Canadian Natural i.e., Canadian Natural and Total Gabon go up and down completely randomly.

Pair Corralation between Canadian Natural and Total Gabon

Assuming the 90 days horizon Canadian Natural Resources is expected to under-perform the Total Gabon. But the stock apears to be less risky and, when comparing its historical volatility, Canadian Natural Resources is 1.6 times less risky than Total Gabon. The stock trades about -0.02 of its potential returns per unit of risk. The Total Gabon is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  8,495  in Total Gabon on April 22, 2025 and sell it today you would earn a total of  10,255  from holding Total Gabon or generate 120.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Canadian Natural Resources  vs.  Total Gabon

Canadian Natural Res

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Natural Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Canadian Natural may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Total Gabon

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Total Gabon are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Total Gabon may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Canadian Natural and Total Gabon

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

The idea behind Canadian Natural Resources and Total Gabon 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.