Correlation Between Enbridge H and Graphite One

Can any of the company-specific risk be diversified away by investing in both Enbridge H and Graphite One 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 Graphite One 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 Graphite One, you can compare the effects of market volatilities on Enbridge H and Graphite One 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 Graphite One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge H and Graphite One.

Diversification Opportunities for Enbridge H and Graphite One

-0.35

Correlation Coefficient

Enbridge H  Graphite One

Very good diversification

The 3 months correlation between Enbridge and Graphite is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge H Cum and Graphite One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite One 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 Graphite One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite One has no effect on the direction of Enbridge H i.e., Enbridge H and Graphite One go up and down completely randomly.

Pair Corralation between Enbridge H and Graphite One

Assuming the 90 days trading horizon Enbridge H Cum is expected to generate 0.15 times more return on investment than Graphite One. However, Enbridge H Cum is 6.48 times less risky than Graphite One. It trades about 0.11 of its potential returns per unit of risk. Graphite One is currently generating about 0.0 per unit of risk. If you would invest  1,834  in Enbridge H Cum on September 28, 2024 and sell it today you would earn a total of  206.00  from holding Enbridge H Cum or generate 11.23% return on investment over 90 days.

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

Enbridge H Cum  vs.  Graphite One

Enbridge H Cum

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge H Cum are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Enbridge H is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Graphite One

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Enbridge H and Graphite One

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

The idea behind Enbridge H Cum and Graphite One 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.