Correlation Between Norman Broadbent and Enbridge

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

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

Diversification Opportunities for Norman Broadbent and Enbridge

-0.9

Correlation Coefficient

Norman Broadbent  Enbridge

Pay attention - limited upside

The 3 months correlation between Norman and Enbridge is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Norman Broadbent Plc and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge and Norman Broadbent 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 Norman Broadbent Plc are associated (or correlated) with Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Norman Broadbent i.e., Norman Broadbent and Enbridge go up and down completely randomly.

Pair Corralation between Norman Broadbent and Enbridge

Assuming the 90 days trading horizon Norman Broadbent Plc is expected to under-perform the Enbridge. In addition to that, Norman Broadbent is 4.05 times more volatile than Enbridge. It trades about -0.17 of its total potential returns per unit of risk. Enbridge is currently generating about 0.29 per unit of volatility. If you would invest  5,611  in Enbridge on October 25, 2024 and sell it today you would earn a total of  837.00  from holding Enbridge or generate 14.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	68.85%
Values	Daily Returns

Norman Broadbent Plc  vs.  Enbridge

Norman Broadbent Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Norman Broadbent Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Enbridge

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Enbridge unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Norman Broadbent and Enbridge

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

The idea behind Norman Broadbent Plc and Enbridge 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.