Correlation Between Enbridge Pref and Bri Chem
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By analyzing existing cross correlation between Enbridge Pref L and Bri Chem Corp, you can compare the effects of market volatilities on Enbridge Pref and Bri Chem 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 Bri Chem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Bri Chem.
Diversification Opportunities for Enbridge Pref and Bri Chem
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enbridge and Bri is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref L and Bri Chem Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bri Chem 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 L are associated (or correlated) with Bri Chem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bri Chem Corp has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Bri Chem go up and down completely randomly.
Pair Corralation between Enbridge Pref and Bri Chem
Assuming the 90 days trading horizon Enbridge Pref is expected to generate 25.01 times less return on investment than Bri Chem. But when comparing it to its historical volatility, Enbridge Pref L is 12.4 times less risky than Bri Chem. It trades about 0.05 of its potential returns per unit of risk. Bri Chem Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Bri Chem Corp on August 31, 2024 and sell it today you would earn a total of 3.00 from holding Bri Chem Corp or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Enbridge Pref L vs. Bri Chem Corp
Performance |
| Timeline |
| Enbridge Pref L |
| Bri Chem Corp |
Enbridge Pref and Bri Chem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge Pref and Bri Chem
The main advantage of trading using opposite Enbridge Pref and Bri Chem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref position performs unexpectedly, Bri Chem 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 Bri Chem will offset losses from the drop in Bri Chem's long position.The idea behind Enbridge Pref L and Bri Chem Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bri Chem vs. Forum Energy Metals | Bri Chem vs. iShares Canadian HYBrid | Bri Chem vs. Brompton European Dividend | Bri Chem vs. Solar Alliance Energy |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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