Correlation Between Enbridge Pref and Enbridge
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By analyzing existing cross correlation between Enbridge Pref 11 and Enbridge, you can compare the effects of market volatilities on Enbridge Pref 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 Enbridge Pref with a short position of Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Enbridge.
Diversification Opportunities for Enbridge Pref and Enbridge
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enbridge and Enbridge is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref 11 and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge and Enbridge Pref 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 Enbridge Pref 11 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 has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Enbridge go up and down completely randomly.
Pair Corralation between Enbridge Pref and Enbridge
Assuming the 90 days trading horizon Enbridge Pref is expected to generate 1.07 times less return on investment than Enbridge. But when comparing it to its historical volatility, Enbridge Pref 11 is 1.25 times less risky than Enbridge. It trades about 0.14 of its potential returns per unit of risk. Enbridge is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 4,302 in Enbridge on September 12, 2024 and sell it today you would earn a total of 1,695 from holding Enbridge or generate 39.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Enbridge Pref 11 vs. Enbridge
Performance |
| Timeline |
| Enbridge Pref 11 |
| Enbridge |
Enbridge Pref and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge Pref and Enbridge
The main advantage of trading using opposite Enbridge Pref and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref 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.| Enbridge Pref vs. Canlan Ice Sports | Enbridge Pref vs. Verizon Communications CDR | Enbridge Pref vs. NeXGold Mining Corp | Enbridge Pref vs. Rogers Communications |
| Enbridge vs. Suncor Energy | Enbridge vs. Toronto Dominion Bank | Enbridge vs. Bank of Nova | Enbridge vs. BCE 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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