Correlation Between Maple Peak and Enbridge Pref

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

By analyzing existing cross correlation between Maple Peak Investments and Enbridge Pref 11, you can compare the effects of market volatilities on Maple Peak and Enbridge Pref 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 Maple Peak with a short position of Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maple Peak and Enbridge Pref.

Diversification Opportunities for Maple Peak and Enbridge Pref

0.0

Correlation Coefficient

Maple Peak  Enbridge Pref

Pay attention - limited upside

The 3 months correlation between Maple and Enbridge is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Maple Peak Investments and Enbridge Pref 11 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 11 and Maple Peak 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 Maple Peak Investments are associated (or correlated) with Enbridge Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Pref 11 has no effect on the direction of Maple Peak i.e., Maple Peak and Enbridge Pref go up and down completely randomly.

Pair Corralation between Maple Peak and Enbridge Pref

If you would invest  1,826  in Enbridge Pref 11 on September 4, 2024 and sell it today you would earn a total of  49.00  from holding Enbridge Pref 11 or generate 2.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Maple Peak Investments  vs.  Enbridge Pref 11

Maple Peak Investments

Risk-Adjusted Performance

0 of 100

Very Weak

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

Enbridge Pref 11

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge Pref 11 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Enbridge Pref is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Maple Peak and Enbridge Pref

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

The idea behind Maple Peak Investments and Enbridge Pref 11 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.