Correlation Between Enbridge Pref and Kelt Exploration
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By analyzing existing cross correlation between Enbridge Pref L and Kelt Exploration, you can compare the effects of market volatilities on Enbridge Pref and Kelt Exploration 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 Kelt Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Kelt Exploration.
Diversification Opportunities for Enbridge Pref and Kelt Exploration
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enbridge and Kelt is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref L and Kelt Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelt Exploration 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 Kelt Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelt Exploration has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Kelt Exploration go up and down completely randomly.
Pair Corralation between Enbridge Pref and Kelt Exploration
Assuming the 90 days trading horizon Enbridge Pref is expected to generate 1.1 times less return on investment than Kelt Exploration. But when comparing it to its historical volatility, Enbridge Pref L is 2.77 times less risky than Kelt Exploration. It trades about 0.2 of its potential returns per unit of risk. Kelt Exploration is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 653.00 in Kelt Exploration on September 1, 2024 and sell it today you would earn a total of 20.00 from holding Kelt Exploration or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Enbridge Pref L vs. Kelt Exploration
Performance |
| Timeline |
| Enbridge Pref L |
| Kelt Exploration |
Enbridge Pref and Kelt Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge Pref and Kelt Exploration
The main advantage of trading using opposite Enbridge Pref and Kelt Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref position performs unexpectedly, Kelt Exploration 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 Kelt Exploration will offset losses from the drop in Kelt Exploration's long position.The idea behind Enbridge Pref L and Kelt Exploration 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.| Kelt Exploration vs. Journey Energy | Kelt Exploration vs. Yangarra Resources | Kelt Exploration vs. Obsidian Energy | Kelt Exploration vs. Pine Cliff 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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