Correlation Between Enbridge Pref and Southern Energy
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By analyzing existing cross correlation between Enbridge Pref 5 and Southern Energy Corp, you can compare the effects of market volatilities on Enbridge Pref and Southern Energy 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 Southern Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Southern Energy.
Diversification Opportunities for Enbridge Pref and Southern Energy
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enbridge and Southern is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref 5 and Southern Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Energy 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 Southern Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Energy Corp has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Southern Energy go up and down completely randomly.
Pair Corralation between Enbridge Pref and Southern Energy
Assuming the 90 days trading horizon Enbridge Pref 5 is expected to generate 0.11 times more return on investment than Southern Energy. However, Enbridge Pref 5 is 8.74 times less risky than Southern Energy. It trades about 0.19 of its potential returns per unit of risk. Southern Energy Corp is currently generating about -0.12 per unit of risk. If you would invest 2,107 in Enbridge Pref 5 on September 1, 2024 and sell it today you would earn a total of 288.00 from holding Enbridge Pref 5 or generate 13.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.64% |
| Values | Daily Returns |
Enbridge Pref 5 vs. Southern Energy Corp
Performance |
| Timeline |
| Enbridge Pref 5 |
| Southern Energy Corp |
Enbridge Pref and Southern Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge Pref and Southern Energy
The main advantage of trading using opposite Enbridge Pref and Southern Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref position performs unexpectedly, Southern Energy 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 Southern Energy will offset losses from the drop in Southern Energy's long position.| Enbridge Pref vs. First National Financial | Enbridge Pref vs. Pollard Banknote Limited | Enbridge Pref vs. Royal Bank of | Enbridge Pref vs. Fairfax Financial 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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