Correlation Between Enbridge Pref and Sage Potash
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By analyzing existing cross correlation between Enbridge Pref 11 and Sage Potash Corp, you can compare the effects of market volatilities on Enbridge Pref and Sage Potash 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 Sage Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Sage Potash.
Diversification Opportunities for Enbridge Pref and Sage Potash
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enbridge and Sage is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref 11 and Sage Potash Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sage Potash Corp 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 Sage Potash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sage Potash Corp has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Sage Potash go up and down completely randomly.
Pair Corralation between Enbridge Pref and Sage Potash
Assuming the 90 days trading horizon Enbridge Pref is expected to generate 2.89 times less return on investment than Sage Potash. But when comparing it to its historical volatility, Enbridge Pref 11 is 12.21 times less risky than Sage Potash. It trades about 0.08 of its potential returns per unit of risk. Sage Potash Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Sage Potash Corp on August 28, 2024 and sell it today you would lose (5.00) from holding Sage Potash Corp or give up 21.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Enbridge Pref 11 vs. Sage Potash Corp
Performance |
| Timeline |
| Enbridge Pref 11 |
| Sage Potash Corp |
Enbridge Pref and Sage Potash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge Pref and Sage Potash
The main advantage of trading using opposite Enbridge Pref and Sage Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref position performs unexpectedly, Sage Potash 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 Sage Potash will offset losses from the drop in Sage Potash's long position.| Enbridge Pref vs. Data Communications Management | Enbridge Pref vs. Major Drilling Group | Enbridge Pref vs. Verizon Communications CDR | Enbridge Pref vs. Arbor Metals Corp |
| Sage Potash vs. Uniteds Limited | Sage Potash vs. E L Financial Corp | Sage Potash vs. Canadian General Investments | Sage Potash vs. Clairvest Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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