Correlation Between CVW CleanTech and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both CVW CleanTech 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 CVW CleanTech and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CleanTech and Pembina Pipeline Corp, you can compare the effects of market volatilities on CVW CleanTech 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 CVW CleanTech with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CleanTech and Pembina Pipeline.
Diversification Opportunities for CVW CleanTech and Pembina Pipeline
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CVW and Pembina is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CVW CleanTech 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 CVW CleanTech 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 CVW CleanTech 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 CVW CleanTech i.e., CVW CleanTech and Pembina Pipeline go up and down completely randomly.
Pair Corralation between CVW CleanTech and Pembina Pipeline
Assuming the 90 days horizon CVW CleanTech is expected to generate 1.7 times more return on investment than Pembina Pipeline. However, CVW CleanTech is 1.7 times more volatile than Pembina Pipeline Corp. It trades about 0.06 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about -0.03 per unit of risk. If you would invest 85.00 in CVW CleanTech on August 29, 2024 and sell it today you would earn a total of 2.00 from holding CVW CleanTech or generate 2.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CleanTech vs. Pembina Pipeline Corp
Performance |
| Timeline |
| CVW CleanTech |
| Pembina Pipeline Corp |
CVW CleanTech and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CleanTech and Pembina Pipeline
The main advantage of trading using opposite CVW CleanTech and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CleanTech 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.| CVW CleanTech vs. First Majestic Silver | CVW CleanTech vs. Ivanhoe Energy | CVW CleanTech vs. Orezone Gold Corp | CVW CleanTech vs. Faraday Copper Corp |
| Pembina Pipeline vs. Labrador Iron Ore | Pembina Pipeline vs. Algoma Steel Group | Pembina Pipeline vs. US Financial 15 | Pembina Pipeline vs. NextSource Materials |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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