Correlation Between Pembina Pipeline and Enbridge
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline 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 Pembina Pipeline and Enbridge 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 Enbridge, you can compare the effects of market volatilities on Pembina Pipeline 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 Pembina Pipeline with a short position of Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Enbridge.
Diversification Opportunities for Pembina Pipeline and Enbridge
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pembina and Enbridge is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge 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 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 Pembina Pipeline i.e., Pembina Pipeline and Enbridge go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Enbridge
Assuming the 90 days horizon Pembina Pipeline Corp is expected to generate 1.17 times more return on investment than Enbridge. However, Pembina Pipeline is 1.17 times more volatile than Enbridge. It trades about 0.09 of its potential returns per unit of risk. Enbridge is currently generating about 0.07 per unit of risk. If you would invest 3,453 in Pembina Pipeline Corp on December 28, 2024 and sell it today you would earn a total of 256.00 from holding Pembina Pipeline Corp or generate 7.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pembina Pipeline Corp vs. Enbridge
Performance |
Timeline |
Pembina Pipeline Corp |
Enbridge |
Pembina Pipeline and Enbridge Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pembina Pipeline and Enbridge
The main advantage of trading using opposite Pembina Pipeline and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline 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.Pembina Pipeline vs. GEELY AUTOMOBILE | Pembina Pipeline vs. T MOBILE US | Pembina Pipeline vs. Mobilezone Holding AG | Pembina Pipeline vs. AFFLUENT MEDICAL SAS |
Enbridge vs. MUTUIONLINE | Enbridge vs. CODERE ONLINE LUX | Enbridge vs. Salesforce | Enbridge vs. Gruppo Mutuionline SpA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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