Correlation Between Pembina Pipeline and ALD SA
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and ALD SA 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 Pembina Pipeline and ALD SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembina Pipeline Corp and ALD SA, you can compare the effects of market volatilities on Pembina Pipeline and ALD SA 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 Pembina Pipeline with a short position of ALD SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and ALD SA.
Diversification Opportunities for Pembina Pipeline and ALD SA
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pembina and ALD is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and ALD SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALD SA and Pembina Pipeline 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 Pembina Pipeline Corp are associated (or correlated) with ALD SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALD SA has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and ALD SA go up and down completely randomly.
Pair Corralation between Pembina Pipeline and ALD SA
Assuming the 90 days horizon Pembina Pipeline Corp is expected to generate 0.44 times more return on investment than ALD SA. However, Pembina Pipeline Corp is 2.29 times less risky than ALD SA. It trades about 0.04 of its potential returns per unit of risk. ALD SA is currently generating about -0.02 per unit of risk. If you would invest 2,815 in Pembina Pipeline Corp on October 4, 2024 and sell it today you would earn a total of 682.00 from holding Pembina Pipeline Corp or generate 24.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Pembina Pipeline Corp vs. ALD SA
Performance |
Timeline |
Pembina Pipeline Corp |
ALD SA |
Pembina Pipeline and ALD SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pembina Pipeline and ALD SA
The main advantage of trading using opposite Pembina Pipeline and ALD SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, ALD SA 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 ALD SA will offset losses from the drop in ALD SA's long position.Pembina Pipeline vs. Enbridge | Pembina Pipeline vs. TC Energy | Pembina Pipeline vs. Cheniere Energy | Pembina Pipeline vs. Kinder Morgan |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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