Correlation Between Enbridge and Blue Star
Can any of the company-specific risk be diversified away by investing in both Enbridge and Blue Star 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 Enbridge and Blue Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enbridge and Blue Star Capital, you can compare the effects of market volatilities on Enbridge and Blue Star 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 Enbridge with a short position of Blue Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge and Blue Star.
Diversification Opportunities for Enbridge and Blue Star
Good diversification
The 3 months correlation between Enbridge and Blue is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge and Blue Star Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Star Capital and Enbridge 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 Enbridge are associated (or correlated) with Blue Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Star Capital has no effect on the direction of Enbridge i.e., Enbridge and Blue Star go up and down completely randomly.
Pair Corralation between Enbridge and Blue Star
Assuming the 90 days trading horizon Enbridge is expected to generate 0.2 times more return on investment than Blue Star. However, Enbridge is 5.12 times less risky than Blue Star. It trades about 0.08 of its potential returns per unit of risk. Blue Star Capital is currently generating about -0.03 per unit of risk. If you would invest 4,617 in Enbridge on September 19, 2024 and sell it today you would earn a total of 1,297 from holding Enbridge or generate 28.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 54.2% |
| Values | Daily Returns |
Enbridge vs. Blue Star Capital
Performance |
| Timeline |
| Enbridge |
| Blue Star Capital |
Enbridge and Blue Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge and Blue Star
The main advantage of trading using opposite Enbridge and Blue Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge position performs unexpectedly, Blue Star 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 Blue Star will offset losses from the drop in Blue Star's long position.| Enbridge vs. Zoom Video Communications | Enbridge vs. Endo International PLC | Enbridge vs. DS Smith PLC | Enbridge vs. Rolls Royce Holdings PLC |
| Blue Star vs. Catalyst Media Group | Blue Star vs. CATLIN GROUP | Blue Star vs. Tamburi Investment Partners | Blue Star vs. Magnora ASA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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