Correlation Between Pembina Pipeline and WANDERER WERKE

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

Diversification Opportunities for Pembina Pipeline and WANDERER WERKE

0.0

Correlation Coefficient

Pembina Pipeline  WANDERER WERKE

Pay attention - limited upside

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

Pair Corralation between Pembina Pipeline and WANDERER WERKE

If you would invest (100.00) in WANDERER WERKE on September 21, 2024 and sell it today you would earn a total of  100.00  from holding WANDERER WERKE or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Pembina Pipeline Corp  vs.  WANDERER WERKE

Pembina Pipeline Corp

Risk-Adjusted Performance

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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 nearly stable basic indicators, Pembina Pipeline is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

WANDERER WERKE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WANDERER WERKE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, WANDERER WERKE is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Pembina Pipeline and WANDERER WERKE

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

The idea behind Pembina Pipeline Corp and WANDERER WERKE 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.