Correlation Between Diamond Estates and Enbridge
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By analyzing existing cross correlation between Diamond Estates Wines and Enbridge Pref 5, you can compare the effects of market volatilities on Diamond Estates and Enbridge 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 Diamond Estates with a short position of Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diamond Estates and Enbridge.
Diversification Opportunities for Diamond Estates and Enbridge
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diamond and Enbridge is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Diamond Estates Wines 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 Diamond Estates 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 Diamond Estates Wines are associated (or correlated) with Enbridge. 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 Diamond Estates i.e., Diamond Estates and Enbridge go up and down completely randomly.
Pair Corralation between Diamond Estates and Enbridge
Assuming the 90 days horizon Diamond Estates is expected to generate 2.62 times less return on investment than Enbridge. In addition to that, Diamond Estates is 4.59 times more volatile than Enbridge Pref 5. It trades about 0.01 of its total potential returns per unit of risk. Enbridge Pref 5 is currently generating about 0.18 per unit of volatility. If you would invest 2,371 in Enbridge Pref 5 on December 8, 2024 and sell it today you would earn a total of 59.00 from holding Enbridge Pref 5 or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Diamond Estates Wines vs. Enbridge Pref 5
Performance |
| Timeline |
| Diamond Estates Wines |
| Enbridge Pref 5 |
Diamond Estates and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diamond Estates and Enbridge
The main advantage of trading using opposite Diamond Estates and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diamond Estates position performs unexpectedly, Enbridge 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 will offset losses from the drop in Enbridge's long position.| Diamond Estates vs. Brookfield Asset Management | ||
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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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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