Correlation Between Enbridge and AGEDB Technology

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

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

Diversification Opportunities for Enbridge and AGEDB Technology

0.09

Correlation Coefficient

Enbridge  AGEDB Technology

Significant diversification

The 3 months correlation between Enbridge and AGEDB is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge and AGEDB Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGEDB Technology and Enbridge 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 are associated (or correlated) with AGEDB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGEDB Technology has no effect on the direction of Enbridge i.e., Enbridge and AGEDB Technology go up and down completely randomly.

Pair Corralation between Enbridge and AGEDB Technology

Assuming the 90 days trading horizon Enbridge is expected to generate 23.53 times less return on investment than AGEDB Technology. But when comparing it to its historical volatility, Enbridge is 26.24 times less risky than AGEDB Technology. It trades about 0.09 of its potential returns per unit of risk. AGEDB Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  15.00  in AGEDB Technology on December 23, 2024 and sell it today you would lose (7.00) from holding AGEDB Technology or give up 46.67% of portfolio value over 90 days.

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

Enbridge  vs.  AGEDB Technology

Enbridge

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental drivers, Enbridge may actually be approaching a critical reversion point that can send shares even higher in April 2025.

AGEDB Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AGEDB Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, AGEDB Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enbridge and AGEDB Technology

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

The idea behind Enbridge and AGEDB Technology 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.