Correlation Between Enbridge Pref and Sage Potash
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By analyzing existing cross correlation between Enbridge Pref 5 and Sage Potash Corp, you can compare the effects of market volatilities on Enbridge Pref and Sage Potash 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 Sage Potash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Sage Potash.
Diversification Opportunities for Enbridge Pref and Sage Potash
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enbridge and Sage is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref 5 and Sage Potash Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sage Potash 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 5 are associated (or correlated) with Sage Potash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sage Potash Corp has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Sage Potash go up and down completely randomly.
Pair Corralation between Enbridge Pref and Sage Potash
Assuming the 90 days trading horizon Enbridge Pref 5 is expected to generate 0.25 times more return on investment than Sage Potash. However, Enbridge Pref 5 is 3.95 times less risky than Sage Potash. It trades about 0.04 of its potential returns per unit of risk. Sage Potash Corp is currently generating about 0.0 per unit of risk. If you would invest 1,717 in Enbridge Pref 5 on August 28, 2024 and sell it today you would earn a total of 678.00 from holding Enbridge Pref 5 or generate 39.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.02% |
| Values | Daily Returns |
Enbridge Pref 5 vs. Sage Potash Corp
Performance |
| Timeline |
| Enbridge Pref 5 |
| Sage Potash Corp |
Enbridge Pref and Sage Potash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge Pref and Sage Potash
The main advantage of trading using opposite Enbridge Pref and Sage Potash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref position performs unexpectedly, Sage Potash 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 Sage Potash will offset losses from the drop in Sage Potash's long position.The idea behind Enbridge Pref 5 and Sage Potash 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.| Sage Potash vs. Uniteds Limited | Sage Potash vs. E L Financial Corp | Sage Potash vs. Canadian General Investments | Sage Potash vs. Clairvest Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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