Correlation Between Pembina Pipeline and Continental Aktiengesellscha

Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Continental Aktiengesellscha 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 Continental Aktiengesellscha 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 Continental Aktiengesellschaft, you can compare the effects of market volatilities on Pembina Pipeline and Continental Aktiengesellscha 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 Continental Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Continental Aktiengesellscha.

Diversification Opportunities for Pembina Pipeline and Continental Aktiengesellscha

-0.62

Correlation Coefficient

Pembina Pipeline  Continental Aktiengesellscha

Excellent diversification

The 3 months correlation between Pembina and Continental is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Continental Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Continental Aktiengesellscha 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 Continental Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Continental Aktiengesellscha has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Continental Aktiengesellscha go up and down completely randomly.

Pair Corralation between Pembina Pipeline and Continental Aktiengesellscha

Assuming the 90 days horizon Pembina Pipeline Corp is expected to generate 0.61 times more return on investment than Continental Aktiengesellscha. However, Pembina Pipeline Corp is 1.64 times less risky than Continental Aktiengesellscha. It trades about 0.05 of its potential returns per unit of risk. Continental Aktiengesellschaft is currently generating about 0.02 per unit of risk. If you would invest  2,749  in Pembina Pipeline Corp on October 23, 2024 and sell it today you would earn a total of  872.00  from holding Pembina Pipeline Corp or generate 31.72% return on investment over 90 days.

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

Pembina Pipeline Corp  vs.  Continental Aktiengesellschaft

Pembina Pipeline Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pembina Pipeline Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Continental Aktiengesellscha

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Continental Aktiengesellschaft are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Continental Aktiengesellscha unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pembina Pipeline and Continental Aktiengesellscha

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

The idea behind Pembina Pipeline Corp and Continental Aktiengesellschaft 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.