Correlation Between Discover Financial and TRANSCANADA
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By analyzing existing cross correlation between Discover Financial Services and TRANSCANADA PIPELINES LTD, you can compare the effects of market volatilities on Discover Financial and TRANSCANADA 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 Discover Financial with a short position of TRANSCANADA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and TRANSCANADA.
Diversification Opportunities for Discover Financial and TRANSCANADA
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Discover and TRANSCANADA is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and TRANSCANADA PIPELINES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANSCANADA PIPELINES LTD and Discover Financial 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 Discover Financial Services are associated (or correlated) with TRANSCANADA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANSCANADA PIPELINES LTD has no effect on the direction of Discover Financial i.e., Discover Financial and TRANSCANADA go up and down completely randomly.
Pair Corralation between Discover Financial and TRANSCANADA
Considering the 90-day investment horizon Discover Financial Services is expected to generate 1.13 times more return on investment than TRANSCANADA. However, Discover Financial is 1.13 times more volatile than TRANSCANADA PIPELINES LTD. It trades about 0.1 of its potential returns per unit of risk. TRANSCANADA PIPELINES LTD is currently generating about 0.0 per unit of risk. If you would invest 10,467 in Discover Financial Services on September 12, 2024 and sell it today you would earn a total of 7,356 from holding Discover Financial Services or generate 70.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 75.0% |
| Values | Daily Returns |
Discover Financial Services vs. TRANSCANADA PIPELINES LTD
Performance |
| Timeline |
| Discover Financial |
| TRANSCANADA PIPELINES LTD |
Discover Financial and TRANSCANADA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discover Financial and TRANSCANADA
The main advantage of trading using opposite Discover Financial and TRANSCANADA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial position performs unexpectedly, TRANSCANADA 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 TRANSCANADA will offset losses from the drop in TRANSCANADA's long position.| Discover Financial vs. Victory Integrity Smallmid Cap | Discover Financial vs. Hilton Worldwide Holdings | Discover Financial vs. NVIDIA | Discover Financial vs. JPMorgan Chase Co |
| TRANSCANADA vs. Playa Hotels Resorts | TRANSCANADA vs. Discover Financial Services | TRANSCANADA vs. Sweetgreen | TRANSCANADA vs. Kura Sushi USA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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