Correlation Between Enbridge Pref and Trench Metals
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By analyzing existing cross correlation between Enbridge Pref 5 and Trench Metals Corp, you can compare the effects of market volatilities on Enbridge Pref and Trench Metals 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 Trench Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Trench Metals.
Diversification Opportunities for Enbridge Pref and Trench Metals
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enbridge and Trench is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref 5 and Trench Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trench Metals 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 Trench Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trench Metals Corp has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Trench Metals go up and down completely randomly.
Pair Corralation between Enbridge Pref and Trench Metals
Assuming the 90 days trading horizon Enbridge Pref 5 is expected to generate 0.26 times more return on investment than Trench Metals. However, Enbridge Pref 5 is 3.91 times less risky than Trench Metals. It trades about 0.04 of its potential returns per unit of risk. Trench Metals Corp is currently generating about -0.02 per unit of risk. If you would invest 1,710 in Enbridge Pref 5 on August 29, 2024 and sell it today you would earn a total of 689.00 from holding Enbridge Pref 5 or generate 40.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
Enbridge Pref 5 vs. Trench Metals Corp
Performance |
| Timeline |
| Enbridge Pref 5 |
| Trench Metals Corp |
Enbridge Pref and Trench Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge Pref and Trench Metals
The main advantage of trading using opposite Enbridge Pref and Trench Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref position performs unexpectedly, Trench Metals 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 Trench Metals will offset losses from the drop in Trench Metals' long position.The idea behind Enbridge Pref 5 and Trench Metals 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.| Trench Metals vs. Baselode Energy Corp | Trench Metals vs. Standard Uranium | Trench Metals vs. Skyharbour Resources | Trench Metals vs. iShares Canadian HYBrid |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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