Correlation Between Enbridge Pref and Peyto ExplorationDevel
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By analyzing existing cross correlation between Enbridge Pref L and Peyto ExplorationDevelopment Corp, you can compare the effects of market volatilities on Enbridge Pref and Peyto ExplorationDevel 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 Peyto ExplorationDevel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Peyto ExplorationDevel.
Diversification Opportunities for Enbridge Pref and Peyto ExplorationDevel
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enbridge and Peyto is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref L and Peyto ExplorationDevelopment C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peyto ExplorationDevel 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 Peyto ExplorationDevel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peyto ExplorationDevel has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Peyto ExplorationDevel go up and down completely randomly.
Pair Corralation between Enbridge Pref and Peyto ExplorationDevel
Assuming the 90 days trading horizon Enbridge Pref is expected to generate 20.56 times less return on investment than Peyto ExplorationDevel. But when comparing it to its historical volatility, Enbridge Pref L is 2.13 times less risky than Peyto ExplorationDevel. It trades about 0.03 of its potential returns per unit of risk. Peyto ExplorationDevelopment Corp is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,524 in Peyto ExplorationDevelopment Corp on August 29, 2024 and sell it today you would earn a total of 156.00 from holding Peyto ExplorationDevelopment Corp or generate 10.24% 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. Peyto ExplorationDevelopment C
Performance |
| Timeline |
| Enbridge Pref L |
| Peyto ExplorationDevel |
Enbridge Pref and Peyto ExplorationDevel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge Pref and Peyto ExplorationDevel
The main advantage of trading using opposite Enbridge Pref and Peyto ExplorationDevel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref position performs unexpectedly, Peyto ExplorationDevel 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 Peyto ExplorationDevel will offset losses from the drop in Peyto ExplorationDevel's long position.| Enbridge Pref vs. CI Financial Corp | Enbridge Pref vs. National Bank of | Enbridge Pref vs. VIP Entertainment Technologies | Enbridge Pref vs. Income Financial Trust |
| Peyto ExplorationDevel vs. Birchcliff Energy | Peyto ExplorationDevel vs. Tourmaline Oil Corp | Peyto ExplorationDevel vs. ARC Resources | Peyto ExplorationDevel vs. Whitecap Resources |
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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