Correlation Between Exchange Income and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both Exchange Income 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 Exchange Income and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Income and Pembina Pipeline Corp, you can compare the effects of market volatilities on Exchange Income 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 Exchange Income with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Income and Pembina Pipeline.
Diversification Opportunities for Exchange Income and Pembina Pipeline
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Exchange and Pembina is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Income 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 Exchange Income 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 Exchange Income 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 Exchange Income i.e., Exchange Income and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Exchange Income and Pembina Pipeline
Assuming the 90 days trading horizon Exchange Income is expected to generate 0.55 times more return on investment than Pembina Pipeline. However, Exchange Income is 1.83 times less risky than Pembina Pipeline. It trades about 0.29 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about -0.02 per unit of risk. If you would invest 5,442 in Exchange Income on August 28, 2024 and sell it today you would earn a total of 220.00 from holding Exchange Income or generate 4.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exchange Income vs. Pembina Pipeline Corp
Performance |
| Timeline |
| Exchange Income |
| Pembina Pipeline Corp |
Exchange Income and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Income and Pembina Pipeline
The main advantage of trading using opposite Exchange Income and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Income 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.| Exchange Income vs. Capital Power | Exchange Income vs. Keyera Corp | Exchange Income vs. Parkland Fuel | Exchange Income vs. TFI International |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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