Correlation Between Primaris Retail and Enbridge D

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

By analyzing existing cross correlation between Primaris Retail RE and Enbridge D Cum, you can compare the effects of market volatilities on Primaris Retail and Enbridge D 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 Primaris Retail with a short position of Enbridge D. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primaris Retail and Enbridge D.

Diversification Opportunities for Primaris Retail and Enbridge D

-0.28

Correlation Coefficient

Primaris Retail  Enbridge D

Very good diversification

The 3 months correlation between Primaris and Enbridge is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE and Enbridge D Cum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge D Cum and Primaris Retail 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 Primaris Retail RE are associated (or correlated) with Enbridge D. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge D Cum has no effect on the direction of Primaris Retail i.e., Primaris Retail and Enbridge D go up and down completely randomly.

Pair Corralation between Primaris Retail and Enbridge D

Assuming the 90 days trading horizon Primaris Retail RE is expected to under-perform the Enbridge D. In addition to that, Primaris Retail is 2.09 times more volatile than Enbridge D Cum. It trades about -0.23 of its total potential returns per unit of risk. Enbridge D Cum is currently generating about 0.25 per unit of volatility. If you would invest  1,873  in Enbridge D Cum on October 12, 2024 and sell it today you would earn a total of  69.00  from holding Enbridge D Cum or generate 3.68% return on investment over 90 days.

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

Primaris Retail RE  vs.  Enbridge D Cum

Primaris Retail RE

Risk-Adjusted Performance

0 of 100

Very Weak

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

Enbridge D Cum

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge D Cum are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Enbridge D may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Primaris Retail and Enbridge D

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

The idea behind Primaris Retail RE and Enbridge D Cum 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.