Correlation Between CoinSmart Financial and Enbridge Pref

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

By analyzing existing cross correlation between CoinSmart Financial and Enbridge Pref 5, you can compare the effects of market volatilities on CoinSmart Financial 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 CoinSmart Financial with a short position of Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoinSmart Financial and Enbridge Pref.

Diversification Opportunities for CoinSmart Financial and Enbridge Pref

0.0

Correlation Coefficient

CoinSmart Financial  Enbridge Pref

Pay attention - limited upside

The 3 months correlation between CoinSmart and Enbridge is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CoinSmart Financial and Enbridge Pref 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 5 and CoinSmart Financial 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 CoinSmart Financial 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 5 has no effect on the direction of CoinSmart Financial i.e., CoinSmart Financial and Enbridge Pref go up and down completely randomly.

Pair Corralation between CoinSmart Financial and Enbridge Pref

Assuming the 90 days trading horizon CoinSmart Financial is expected to generate 1.96 times more return on investment than Enbridge Pref. However, CoinSmart Financial is 1.96 times more volatile than Enbridge Pref 5. It trades about 0.05 of its potential returns per unit of risk. Enbridge Pref 5 is currently generating about 0.04 per unit of risk. If you would invest  12.00  in CoinSmart Financial on October 21, 2024 and sell it today you would earn a total of  10.00  from holding CoinSmart Financial or generate 83.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.59%
Values	Daily Returns

CoinSmart Financial  vs.  Enbridge Pref 5

CoinSmart Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CoinSmart Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, CoinSmart Financial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Enbridge Pref 5

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge Pref 5 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Enbridge Pref is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with CoinSmart Financial and Enbridge Pref

The main advantage of trading using opposite CoinSmart Financial and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CoinSmart Financial 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 CoinSmart Financial and Enbridge Pref 5 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.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.