Correlation Between Pembina Pipeline and Energold Drilling

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

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

Diversification Opportunities for Pembina Pipeline and Energold Drilling

0.0

Correlation Coefficient

Pembina Pipeline  Energold Drilling

Pay attention - limited upside

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

Pair Corralation between Pembina Pipeline and Energold Drilling

Assuming the 90 days horizon Pembina Pipeline is expected to generate 0.41 times more return on investment than Energold Drilling. However, Pembina Pipeline is 2.43 times less risky than Energold Drilling. It trades about 0.05 of its potential returns per unit of risk. Energold Drilling Corp is currently generating about -0.04 per unit of risk. If you would invest  1,055  in Pembina Pipeline on October 26, 2024 and sell it today you would earn a total of  528.00  from holding Pembina Pipeline or generate 50.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Pembina Pipeline  vs.  Energold Drilling Corp

Pembina Pipeline

Risk-Adjusted Performance

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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.

Energold Drilling Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energold Drilling Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Energold Drilling is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Pembina Pipeline and Energold Drilling

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

The idea behind Pembina Pipeline and Energold Drilling Corp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.