Correlation Between BCE and EnLink
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By analyzing existing cross correlation between BCE Inc and EnLink Midstream Partners, you can compare the effects of market volatilities on BCE and EnLink 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 BCE with a short position of EnLink. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCE and EnLink.
Diversification Opportunities for BCE and EnLink
Poor diversification
The 3 months correlation between BCE and EnLink is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding BCE Inc and EnLink Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EnLink Midstream Partners and BCE 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 BCE Inc are associated (or correlated) with EnLink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EnLink Midstream Partners has no effect on the direction of BCE i.e., BCE and EnLink go up and down completely randomly.
Pair Corralation between BCE and EnLink
Considering the 90-day investment horizon BCE Inc is expected to under-perform the EnLink. But the stock apears to be less risky and, when comparing its historical volatility, BCE Inc is 63.46 times less risky than EnLink. The stock trades about -0.07 of its potential returns per unit of risk. The EnLink Midstream Partners is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,564 in EnLink Midstream Partners on September 3, 2024 and sell it today you would lose (271.00) from holding EnLink Midstream Partners or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 83.84% |
| Values | Daily Returns |
BCE Inc vs. EnLink Midstream Partners
Performance |
| Timeline |
| BCE Inc |
| EnLink Midstream Partners |
BCE and EnLink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BCE and EnLink
The main advantage of trading using opposite BCE and EnLink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCE position performs unexpectedly, EnLink 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 EnLink will offset losses from the drop in EnLink's long position.The idea behind BCE Inc and EnLink Midstream Partners 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.| EnLink vs. Inflection Point Acquisition | EnLink vs. Sabre Corpo | EnLink vs. BCE Inc | EnLink vs. Aldel Financial II |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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