Correlation Between Enbridge and Goodfood Market

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Can any of the company-specific risk be diversified away by investing in both Enbridge and Goodfood Market 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 Goodfood Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enbridge and Goodfood Market Corp, you can compare the effects of market volatilities on Enbridge and Goodfood Market 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 Goodfood Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge and Goodfood Market.

Diversification Opportunities for Enbridge and Goodfood Market

EnbridgeGoodfoodDiversified AwayEnbridgeGoodfoodDiversified Away100%
0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Enbridge and Goodfood is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge and Goodfood Market Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goodfood Market Corp 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 Goodfood Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goodfood Market Corp has no effect on the direction of Enbridge i.e., Enbridge and Goodfood Market go up and down completely randomly.

Pair Corralation between Enbridge and Goodfood Market

Assuming the 90 days trading horizon Enbridge is expected to generate 0.48 times more return on investment than Goodfood Market. However, Enbridge is 2.1 times less risky than Goodfood Market. It trades about -0.23 of its potential returns per unit of risk. Goodfood Market Corp is currently generating about -0.44 per unit of risk. If you would invest  6,331  in Enbridge on November 28, 2024 and sell it today you would lose (368.00) from holding Enbridge or give up 5.81% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Enbridge  vs.  Goodfood Market Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50510
JavaScript chart by amCharts 3.21.15ENB FOOD
       Timeline  
Enbridge 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Enbridge has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Enbridge is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb58596061626364
Goodfood Market Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Goodfood Market Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.350.40.450.5

Enbridge and Goodfood Market Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.09-2.31-1.54-0.760.00.761.542.323.113.89 0.10.20.30.4
JavaScript chart by amCharts 3.21.15ENB FOOD
       Returns  

Pair Trading with Enbridge and Goodfood Market

The main advantage of trading using opposite Enbridge and Goodfood Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge position performs unexpectedly, Goodfood Market 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 Goodfood Market will offset losses from the drop in Goodfood Market's long position.
The idea behind Enbridge and Goodfood Market 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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