Correlation Between ATLANTIC PETROLPF and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both ATLANTIC PETROLPF and Pembina Pipeline 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 ATLANTIC PETROLPF and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATLANTIC PETROLPF DK and Pembina Pipeline Corp, you can compare the effects of market volatilities on ATLANTIC PETROLPF and Pembina Pipeline 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 ATLANTIC PETROLPF with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATLANTIC PETROLPF and Pembina Pipeline.
Diversification Opportunities for ATLANTIC PETROLPF and Pembina Pipeline
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ATLANTIC and Pembina is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ATLANTIC PETROLPF DK and Pembina Pipeline Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline Corp and ATLANTIC PETROLPF 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 ATLANTIC PETROLPF DK are associated (or correlated) with Pembina Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembina Pipeline Corp has no effect on the direction of ATLANTIC PETROLPF i.e., ATLANTIC PETROLPF and Pembina Pipeline go up and down completely randomly.
Pair Corralation between ATLANTIC PETROLPF and Pembina Pipeline
Assuming the 90 days horizon ATLANTIC PETROLPF DK is expected to generate 8.54 times more return on investment than Pembina Pipeline. However, ATLANTIC PETROLPF is 8.54 times more volatile than Pembina Pipeline Corp. It trades about 0.45 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about 0.19 per unit of risk. If you would invest 16.00 in ATLANTIC PETROLPF DK on October 22, 2024 and sell it today you would earn a total of 13.00 from holding ATLANTIC PETROLPF DK or generate 81.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATLANTIC PETROLPF DK vs. Pembina Pipeline Corp
Performance |
| Timeline |
| ATLANTIC PETROLPF |
| Pembina Pipeline Corp |
ATLANTIC PETROLPF and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATLANTIC PETROLPF and Pembina Pipeline
The main advantage of trading using opposite ATLANTIC PETROLPF and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATLANTIC PETROLPF position performs unexpectedly, Pembina Pipeline 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 Pembina Pipeline will offset losses from the drop in Pembina Pipeline's long position.| ATLANTIC PETROLPF vs. Zijin Mining Group | ATLANTIC PETROLPF vs. Forsys Metals Corp | ATLANTIC PETROLPF vs. TEXAS ROADHOUSE | ATLANTIC PETROLPF vs. Stag Industrial |
| Pembina Pipeline vs. Perseus Mining Limited | Pembina Pipeline vs. SBI Insurance Group | Pembina Pipeline vs. ANGLO ASIAN MINING | Pembina Pipeline vs. Insurance Australia Group |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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