Correlation Between Pembina Pipeline and 26444HAE1

Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and 26444HAE1 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 26444HAE1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pembina Pipeline and DUKE ENERGY FLA, you can compare the effects of market volatilities on Pembina Pipeline and 26444HAE1 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 26444HAE1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and 26444HAE1.

Diversification Opportunities for Pembina Pipeline and 26444HAE1

0.25

Correlation Coefficient

Pembina Pipeline  26444HAE1

Modest diversification

The 3 months correlation between Pembina and 26444HAE1 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline and DUKE ENERGY FLA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY FLA 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 26444HAE1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY FLA has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and 26444HAE1 go up and down completely randomly.

Pair Corralation between Pembina Pipeline and 26444HAE1

Assuming the 90 days horizon Pembina Pipeline is expected to under-perform the 26444HAE1. But the pink sheet apears to be less risky and, when comparing its historical volatility, Pembina Pipeline is 1.36 times less risky than 26444HAE1. The pink sheet trades about -0.04 of its potential returns per unit of risk. The DUKE ENERGY FLA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  9,761  in DUKE ENERGY FLA on October 25, 2024 and sell it today you would earn a total of  11.00  from holding DUKE ENERGY FLA or generate 0.11% 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  vs.  DUKE ENERGY FLA

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

DUKE ENERGY FLA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DUKE ENERGY FLA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26444HAE1 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Pembina Pipeline and 26444HAE1

The main advantage of trading using opposite Pembina Pipeline and 26444HAE1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, 26444HAE1 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 26444HAE1 will offset losses from the drop in 26444HAE1's long position.

The idea behind Pembina Pipeline and DUKE ENERGY FLA 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.