Correlation Between Enbridge H and Fredonia Mining
Can any of the company-specific risk be diversified away by investing in both Enbridge H and Fredonia Mining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Enbridge H and Fredonia Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enbridge H Cum and Fredonia Mining, you can compare the effects of market volatilities on Enbridge H and Fredonia Mining 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 H with a short position of Fredonia Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge H and Fredonia Mining.
Diversification Opportunities for Enbridge H and Fredonia Mining
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enbridge and Fredonia is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge H Cum and Fredonia Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fredonia Mining and Enbridge H 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 H Cum are associated (or correlated) with Fredonia Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fredonia Mining has no effect on the direction of Enbridge H i.e., Enbridge H and Fredonia Mining go up and down completely randomly.
Pair Corralation between Enbridge H and Fredonia Mining
Assuming the 90 days trading horizon Enbridge H Cum is expected to generate 0.04 times more return on investment than Fredonia Mining. However, Enbridge H Cum is 23.92 times less risky than Fredonia Mining. It trades about 0.35 of its potential returns per unit of risk. Fredonia Mining is currently generating about -0.16 per unit of risk. If you would invest 1,980 in Enbridge H Cum on September 22, 2024 and sell it today you would earn a total of 52.00 from holding Enbridge H Cum or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enbridge H Cum vs. Fredonia Mining
Performance |
| Timeline |
| Enbridge H Cum |
| Fredonia Mining |
Enbridge H and Fredonia Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge H and Fredonia Mining
The main advantage of trading using opposite Enbridge H and Fredonia Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge H position performs unexpectedly, Fredonia Mining 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 Fredonia Mining will offset losses from the drop in Fredonia Mining's long position.| Enbridge H vs. Enbridge Pref Series | Enbridge H vs. Enbridge Pref 13 | Enbridge H vs. Pembina Pipeline Corp | Enbridge H vs. BMO Aggregate Bond |
| Fredonia Mining vs. Canso Select Opportunities | Fredonia Mining vs. Exco Technologies Limited | Fredonia Mining vs. Precious Metals And | Fredonia Mining vs. Lion One Metals |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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