Correlation Between Pembina Pipeline and Tesla
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Tesla 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 Tesla into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembina Pipeline Corp and Tesla Inc CDR, you can compare the effects of market volatilities on Pembina Pipeline and Tesla 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 Tesla. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Tesla.
Diversification Opportunities for Pembina Pipeline and Tesla
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pembina and Tesla is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Tesla Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tesla Inc CDR 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 Corp are associated (or correlated) with Tesla. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tesla Inc CDR has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Tesla go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Tesla
Assuming the 90 days trading horizon Pembina Pipeline is expected to generate 12.72 times less return on investment than Tesla. But when comparing it to its historical volatility, Pembina Pipeline Corp is 5.49 times less risky than Tesla. It trades about 0.07 of its potential returns per unit of risk. Tesla Inc CDR is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,801 in Tesla Inc CDR on September 24, 2024 and sell it today you would earn a total of 2,036 from holding Tesla Inc CDR or generate 113.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Pembina Pipeline Corp vs. Tesla Inc CDR
Performance |
Timeline |
Pembina Pipeline Corp |
Tesla Inc CDR |
Pembina Pipeline and Tesla Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Pembina Pipeline and Tesla
The main advantage of trading using opposite Pembina Pipeline and Tesla positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Tesla 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 Tesla will offset losses from the drop in Tesla's long position.Pembina Pipeline vs. InPlay Oil Corp | Pembina Pipeline vs. Maple Leaf Foods | Pembina Pipeline vs. Summa Silver Corp | Pembina Pipeline vs. Goodfood Market Corp |
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Check out your portfolio center.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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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