Correlation Between Bip Investment and Enbridge Pref
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By analyzing existing cross correlation between Bip Investment Corp and Enbridge Pref 5, you can compare the effects of market volatilities on Bip Investment 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 Bip Investment with a short position of Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bip Investment and Enbridge Pref.
Diversification Opportunities for Bip Investment and Enbridge Pref
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bip and Enbridge is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Bip Investment Corp 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 Bip Investment 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 Bip Investment Corp 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 Bip Investment i.e., Bip Investment and Enbridge Pref go up and down completely randomly.
Pair Corralation between Bip Investment and Enbridge Pref
Assuming the 90 days trading horizon Bip Investment Corp is expected to under-perform the Enbridge Pref. In addition to that, Bip Investment is 2.29 times more volatile than Enbridge Pref 5. It trades about -0.1 of its total potential returns per unit of risk. Enbridge Pref 5 is currently generating about 0.15 per unit of volatility. If you would invest 2,367 in Enbridge Pref 5 on September 12, 2024 and sell it today you would earn a total of 24.00 from holding Enbridge Pref 5 or generate 1.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Bip Investment Corp vs. Enbridge Pref 5
Performance |
| Timeline |
| Bip Investment Corp |
| Enbridge Pref 5 |
Bip Investment and Enbridge Pref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bip Investment and Enbridge Pref
The main advantage of trading using opposite Bip Investment and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bip Investment 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.| Bip Investment vs. Brookfield Infrastructure Partners | Bip Investment vs. Brookfield Infrastructure Partners | Bip Investment vs. iShares Canadian HYBrid | Bip Investment vs. Solar Alliance Energy |
| Enbridge Pref vs. Enbridge Pref 11 | Enbridge Pref vs. Enbridge Pref L | Enbridge Pref vs. E Split Corp | Enbridge Pref vs. E Split Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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