Correlation Between Enbridge Pref and Partners Value

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

By analyzing existing cross correlation between Enbridge Pref 7 and Partners Value Investments, you can compare the effects of market volatilities on Enbridge Pref and Partners Value 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 Partners Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Partners Value.

Diversification Opportunities for Enbridge Pref and Partners Value

-0.46

Correlation Coefficient

Enbridge Pref  Partners Value

Very good diversification

The 3 months correlation between Enbridge and Partners is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref 7 and Partners Value Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partners Value Inves 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 7 are associated (or correlated) with Partners Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partners Value Inves has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Partners Value go up and down completely randomly.

Pair Corralation between Enbridge Pref and Partners Value

Assuming the 90 days trading horizon Enbridge Pref 7 is expected to generate 0.22 times more return on investment than Partners Value. However, Enbridge Pref 7 is 4.64 times less risky than Partners Value. It trades about 0.12 of its potential returns per unit of risk. Partners Value Investments is currently generating about -0.14 per unit of risk. If you would invest  1,989  in Enbridge Pref 7 on December 26, 2024 and sell it today you would earn a total of  61.00  from holding Enbridge Pref 7 or generate 3.07% return on investment over 90 days.

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

Enbridge Pref 7  vs.  Partners Value Investments

Enbridge Pref 7

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge Pref 7 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Enbridge Pref is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Partners Value Inves

Risk-Adjusted Performance

Very Weak

Over the last 90 days Partners Value Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Enbridge Pref and Partners Value

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

The idea behind Enbridge Pref 7 and Partners Value Investments 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.