Correlation Between Enbridge and Dow Jones
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By analyzing existing cross correlation between Enbridge Pref Series and Dow Jones Industrial, you can compare the effects of market volatilities on Enbridge and Dow Jones 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 with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge and Dow Jones.
Diversification Opportunities for Enbridge and Dow Jones
Good diversification
The 3 months correlation between Enbridge and Dow is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref Series and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Enbridge 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 Series are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Enbridge i.e., Enbridge and Dow Jones go up and down completely randomly.
Pair Corralation between Enbridge and Dow Jones
Assuming the 90 days trading horizon Enbridge Pref Series is expected to generate 0.75 times more return on investment than Dow Jones. However, Enbridge Pref Series is 1.33 times less risky than Dow Jones. It trades about -0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.31 per unit of risk. If you would invest 2,395 in Enbridge Pref Series on December 11, 2024 and sell it today you would lose (23.00) from holding Enbridge Pref Series or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enbridge Pref Series vs. Dow Jones Industrial
Performance |
| Timeline |
Enbridge and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Enbridge Pref Series
Pair trading matchups for Enbridge
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Enbridge and Dow Jones
The main advantage of trading using opposite Enbridge and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Enbridge vs. Pembina Pipeline Corp | Enbridge vs. Emera Inc | Enbridge vs. Enbridge Pref 13 | Enbridge vs. Enbridge Pref 15 |
| Dow Jones vs. The Gap, | Dow Jones vs. Corporacion America Airports | Dow Jones vs. Mesa Air Group | Dow Jones vs. National Vision Holdings |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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