Correlation Between Enbridge H and Aztec Minerals

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

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

Diversification Opportunities for Enbridge H and Aztec Minerals

-0.66

Correlation Coefficient

Enbridge H  Aztec Minerals

Excellent diversification

The 3 months correlation between Enbridge and Aztec is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge H Cum and Aztec Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aztec Minerals Corp and Enbridge H 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 H Cum are associated (or correlated) with Aztec Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aztec Minerals Corp has no effect on the direction of Enbridge H i.e., Enbridge H and Aztec Minerals go up and down completely randomly.

Pair Corralation between Enbridge H and Aztec Minerals

Assuming the 90 days trading horizon Enbridge H Cum is expected to generate 0.06 times more return on investment than Aztec Minerals. However, Enbridge H Cum is 17.32 times less risky than Aztec Minerals. It trades about 0.25 of its potential returns per unit of risk. Aztec Minerals Corp is currently generating about 0.01 per unit of risk. If you would invest  1,959  in Enbridge H Cum on October 13, 2024 and sell it today you would earn a total of  126.00  from holding Enbridge H Cum or generate 6.43% return on investment over 90 days.

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

Enbridge H Cum  vs.  Aztec Minerals Corp

Enbridge H Cum

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge H Cum are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Enbridge H may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Aztec Minerals Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aztec Minerals Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Aztec Minerals is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Enbridge H and Aztec Minerals

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

The idea behind Enbridge H Cum and Aztec Minerals Corp 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.

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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.