Correlation Between Enbridge Pref and Condor Energies

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

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

Diversification Opportunities for Enbridge Pref and Condor Energies

-0.62

Correlation Coefficient

Enbridge Pref  Condor Energies

Excellent diversification

The 3 months correlation between Enbridge and Condor is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref L and Condor Energies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Condor Energies 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 L are associated (or correlated) with Condor Energies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Condor Energies has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Condor Energies go up and down completely randomly.

Pair Corralation between Enbridge Pref and Condor Energies

Assuming the 90 days trading horizon Enbridge Pref L is expected to generate 0.21 times more return on investment than Condor Energies. However, Enbridge Pref L is 4.78 times less risky than Condor Energies. It trades about 0.06 of its potential returns per unit of risk. Condor Energies is currently generating about -0.23 per unit of risk. If you would invest  2,210  in Enbridge Pref L on September 30, 2024 and sell it today you would earn a total of  37.00  from holding Enbridge Pref L or generate 1.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	97.62%
Values	Daily Returns

Enbridge Pref L  vs.  Condor Energies

Enbridge Pref L

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enbridge Pref L has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Enbridge Pref is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Condor Energies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Condor Energies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Condor Energies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enbridge Pref and Condor Energies

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

The idea behind Enbridge Pref L and Condor Energies 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..