Correlation Between Excelerate Energy and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both Excelerate Energy 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 Excelerate Energy and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelerate Energy and Pembina Pipeline Corp, you can compare the effects of market volatilities on Excelerate Energy 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 Excelerate Energy with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelerate Energy and Pembina Pipeline.
Diversification Opportunities for Excelerate Energy and Pembina Pipeline
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Excelerate and Pembina is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Excelerate Energy 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 Excelerate Energy 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 Excelerate Energy 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 Excelerate Energy i.e., Excelerate Energy and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Excelerate Energy and Pembina Pipeline
Allowing for the 90-day total investment horizon Excelerate Energy is expected to generate 3.17 times more return on investment than Pembina Pipeline. However, Excelerate Energy is 3.17 times more volatile than Pembina Pipeline Corp. It trades about 0.34 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about 0.06 per unit of risk. If you would invest 2,343 in Excelerate Energy on August 24, 2024 and sell it today you would earn a total of 699.00 from holding Excelerate Energy or generate 29.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Excelerate Energy vs. Pembina Pipeline Corp
Performance |
| Timeline |
| Excelerate Energy |
| Pembina Pipeline Corp |
Excelerate Energy and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excelerate Energy and Pembina Pipeline
The main advantage of trading using opposite Excelerate Energy and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelerate Energy 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.| Excelerate Energy vs. Atlantica Sustainable Infrastructure | Excelerate Energy vs. Clearway Energy | Excelerate Energy vs. Brookfield Renewable Corp | Excelerate Energy vs. Nextera Energy Partners |
| Pembina Pipeline vs. LTC Properties | Pembina Pipeline vs. Main Street Capital | Pembina Pipeline vs. STAG Industrial | Pembina Pipeline vs. Gladstone Investment |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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