Correlation Between Pembina Pipeline and Allient

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

By analyzing existing cross correlation between Pembina Pipeline and Allient, you can compare the effects of market volatilities on Pembina Pipeline and Allient 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 Allient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Allient.

Diversification Opportunities for Pembina Pipeline and Allient

-0.67

Correlation Coefficient

Pembina Pipeline  Allient

Excellent diversification

The 3 months correlation between Pembina and Allient is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline and Allient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allient 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 are associated (or correlated) with Allient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allient has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Allient go up and down completely randomly.

Pair Corralation between Pembina Pipeline and Allient

Assuming the 90 days horizon Pembina Pipeline is expected to under-perform the Allient. But the pink sheet apears to be less risky and, when comparing its historical volatility, Pembina Pipeline is 5.19 times less risky than Allient. The pink sheet trades about -0.12 of its potential returns per unit of risk. The Allient is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,697  in Allient on October 23, 2024 and sell it today you would earn a total of  883.00  from holding Allient or generate 52.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Pembina Pipeline  vs.  Allient

Pembina Pipeline

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pembina Pipeline 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 recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Allient

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allient are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Allient unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Pembina Pipeline and Allient

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

The idea behind Pembina Pipeline and Allient 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.