Correlation Between Primaris Retail and Enbridge Pref

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

Diversification Opportunities for Primaris Retail and Enbridge Pref

0.06

Correlation Coefficient

Primaris Retail  Enbridge Pref

Significant diversification

The 3 months correlation between Primaris and Enbridge is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE and Enbridge Pref L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref L 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 Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Pref L has no effect on the direction of Primaris Retail i.e., Primaris Retail and Enbridge Pref go up and down completely randomly.

Pair Corralation between Primaris Retail and Enbridge Pref

Assuming the 90 days trading horizon Primaris Retail RE is expected to under-perform the Enbridge Pref. In addition to that, Primaris Retail is 2.51 times more volatile than Enbridge Pref L. It trades about 0.0 of its total potential returns per unit of risk. Enbridge Pref L is currently generating about 0.03 per unit of volatility. If you would invest  2,218  in Enbridge Pref L on September 23, 2024 and sell it today you would earn a total of  7.00  from holding Enbridge Pref L or generate 0.32% return on investment over 90 days.

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

Primaris Retail RE  vs.  Enbridge Pref L

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 Pref L

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge Pref L are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Enbridge Pref is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Primaris Retail and Enbridge Pref

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

The idea behind Primaris Retail RE and Enbridge Pref L 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.