Correlation Between Enbridge Pref and Vermilion Energy
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By analyzing existing cross correlation between Enbridge Pref 11 and Vermilion Energy, you can compare the effects of market volatilities on Enbridge Pref and Vermilion Energy 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 Vermilion Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Vermilion Energy.
Diversification Opportunities for Enbridge Pref and Vermilion Energy
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enbridge and Vermilion is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref 11 and Vermilion Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vermilion Energy 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 Vermilion Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vermilion Energy has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Vermilion Energy go up and down completely randomly.
Pair Corralation between Enbridge Pref and Vermilion Energy
Assuming the 90 days trading horizon Enbridge Pref 11 is expected to generate 0.31 times more return on investment than Vermilion Energy. However, Enbridge Pref 11 is 3.24 times less risky than Vermilion Energy. It trades about 0.17 of its potential returns per unit of risk. Vermilion Energy is currently generating about 0.01 per unit of risk. If you would invest 1,457 in Enbridge Pref 11 on September 2, 2024 and sell it today you would earn a total of 443.00 from holding Enbridge Pref 11 or generate 30.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Enbridge Pref 11 vs. Vermilion Energy
Performance |
| Timeline |
| Enbridge Pref 11 |
| Vermilion Energy |
Enbridge Pref and Vermilion Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge Pref and Vermilion Energy
The main advantage of trading using opposite Enbridge Pref and Vermilion Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref position performs unexpectedly, Vermilion Energy 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 Vermilion Energy will offset losses from the drop in Vermilion Energy's long position.| Enbridge Pref vs. Maple Leaf Foods | Enbridge Pref vs. NeuPath Health | Enbridge Pref vs. A W FOOD | Enbridge Pref vs. High Liner Foods |
| Vermilion Energy vs. Whitecap Resources | Vermilion Energy vs. ARC Resources | Vermilion Energy vs. Tourmaline Oil Corp | Vermilion Energy vs. MEG Energy Corp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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