Correlation Between Enbridge Pref and Sun Peak

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

By analyzing existing cross correlation between Enbridge Pref 13 and Sun Peak Metals, you can compare the effects of market volatilities on Enbridge Pref and Sun Peak 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 Sun Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Sun Peak.

Diversification Opportunities for Enbridge Pref and Sun Peak

0.22

Correlation Coefficient

Enbridge Pref  Sun Peak

Modest diversification

The 3 months correlation between Enbridge and Sun is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref 13 and Sun Peak Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Peak Metals 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 13 are associated (or correlated) with Sun Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Peak Metals has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Sun Peak go up and down completely randomly.

Pair Corralation between Enbridge Pref and Sun Peak

Assuming the 90 days trading horizon Enbridge Pref is expected to generate 19.39 times less return on investment than Sun Peak. But when comparing it to its historical volatility, Enbridge Pref 13 is 13.17 times less risky than Sun Peak. It trades about 0.02 of its potential returns per unit of risk. Sun Peak Metals is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  30.00  in Sun Peak Metals on December 23, 2024 and sell it today you would earn a total of  1.00  from holding Sun Peak Metals or generate 3.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Enbridge Pref 13  vs.  Sun Peak Metals

Enbridge Pref 13

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge Pref 13 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Enbridge Pref is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Sun Peak Metals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Peak Metals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sun Peak may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Enbridge Pref and Sun Peak

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

The idea behind Enbridge Pref 13 and Sun Peak Metals 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.