Correlation Between Enbridge Pref and New Pacific
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By analyzing existing cross correlation between Enbridge Pref L and New Pacific Metals, you can compare the effects of market volatilities on Enbridge Pref and New Pacific 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 New Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and New Pacific.
Diversification Opportunities for Enbridge Pref and New Pacific
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enbridge and New is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref L and New Pacific Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Pacific 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 L are associated (or correlated) with New Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Pacific Metals has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and New Pacific go up and down completely randomly.
Pair Corralation between Enbridge Pref and New Pacific
Assuming the 90 days trading horizon Enbridge Pref L is expected to generate 0.17 times more return on investment than New Pacific. However, Enbridge Pref L is 5.87 times less risky than New Pacific. It trades about 0.13 of its potential returns per unit of risk. New Pacific Metals is currently generating about -0.18 per unit of risk. If you would invest 2,174 in Enbridge Pref L on October 27, 2024 and sell it today you would earn a total of 103.00 from holding Enbridge Pref L or generate 4.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Enbridge Pref L vs. New Pacific Metals
Performance |
Timeline |
Enbridge Pref L |
New Pacific Metals |
Enbridge Pref and New Pacific Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enbridge Pref and New Pacific
The main advantage of trading using opposite Enbridge Pref and New Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref position performs unexpectedly, New Pacific 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 New Pacific will offset losses from the drop in New Pacific's long position.Enbridge Pref vs. Advent Wireless | ||
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Check out your portfolio center.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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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