Correlation Between EIDESVIK OFFSHORE and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EIDESVIK OFFSHORE NK and Pembina Pipeline Corp, you can compare the effects of market volatilities on EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and Pembina Pipeline.
Diversification Opportunities for EIDESVIK OFFSHORE and Pembina Pipeline
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EIDESVIK and Pembina is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK 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 EIDESVIK OFFSHORE 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 EIDESVIK OFFSHORE NK 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 EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and Pembina Pipeline go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and Pembina Pipeline
Assuming the 90 days horizon EIDESVIK OFFSHORE is expected to generate 5.39 times less return on investment than Pembina Pipeline. In addition to that, EIDESVIK OFFSHORE is 1.16 times more volatile than Pembina Pipeline Corp. It trades about 0.04 of its total potential returns per unit of risk. Pembina Pipeline Corp is currently generating about 0.23 per unit of volatility. If you would invest 3,844 in Pembina Pipeline Corp on August 28, 2024 and sell it today you would earn a total of 242.00 from holding Pembina Pipeline Corp or generate 6.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
EIDESVIK OFFSHORE NK vs. Pembina Pipeline Corp
Performance |
| Timeline |
| EIDESVIK OFFSHORE |
| Pembina Pipeline Corp |
EIDESVIK OFFSHORE and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIDESVIK OFFSHORE and Pembina Pipeline
The main advantage of trading using opposite EIDESVIK OFFSHORE and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE 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.| EIDESVIK OFFSHORE vs. MOVIE GAMES SA | EIDESVIK OFFSHORE vs. Townsquare Media | EIDESVIK OFFSHORE vs. Flutter Entertainment PLC | EIDESVIK OFFSHORE vs. RCS MediaGroup SpA |
| Pembina Pipeline vs. Kinder Morgan | Pembina Pipeline vs. The Williams Companies | Pembina Pipeline vs. ONEOK Inc |
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 Stocks Directory module to find actively traded stocks across global markets.
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