Correlation Between Corsair Gaming and Enbridge

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

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

Diversification Opportunities for Corsair Gaming and Enbridge

0.77

Correlation Coefficient

Corsair Gaming  Enbridge

Poor diversification

The 3 months correlation between Corsair and Enbridge is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Corsair Gaming and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge and Corsair Gaming 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 Corsair Gaming are associated (or correlated) with Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Corsair Gaming i.e., Corsair Gaming and Enbridge go up and down completely randomly.

Pair Corralation between Corsair Gaming and Enbridge

Assuming the 90 days horizon Corsair Gaming is expected to generate 3.8 times more return on investment than Enbridge. However, Corsair Gaming is 3.8 times more volatile than Enbridge. It trades about 0.13 of its potential returns per unit of risk. Enbridge is currently generating about 0.18 per unit of risk. If you would invest  590.00  in Corsair Gaming on October 24, 2024 and sell it today you would earn a total of  215.00  from holding Corsair Gaming or generate 36.44% return on investment over 90 days.

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

Corsair Gaming  vs.  Enbridge

Corsair Gaming

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Corsair Gaming are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Corsair Gaming reported solid returns over the last few months and may actually be approaching a breakup point.

Enbridge

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Enbridge reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Corsair Gaming and Enbridge

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

The idea behind Corsair Gaming and Enbridge 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.