Correlation Between Enbridge and Real Estate
Can any of the company-specific risk be diversified away by investing in both Enbridge and Real Estate 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 and Real Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enbridge and Real Estate E Commerce, you can compare the effects of market volatilities on Enbridge and Real Estate 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 with a short position of Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge and Real Estate.
Diversification Opportunities for Enbridge and Real Estate
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Enbridge and Real is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge and Real Estate E Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate E and Enbridge 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 are associated (or correlated) with Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate E has no effect on the direction of Enbridge i.e., Enbridge and Real Estate go up and down completely randomly.
Pair Corralation between Enbridge and Real Estate
Assuming the 90 days trading horizon Enbridge is expected to generate 0.58 times more return on investment than Real Estate. However, Enbridge is 1.72 times less risky than Real Estate. It trades about 0.19 of its potential returns per unit of risk. Real Estate E Commerce is currently generating about -0.08 per unit of risk. If you would invest 6,005 in Enbridge on October 9, 2024 and sell it today you would earn a total of 156.00 from holding Enbridge or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enbridge vs. Real Estate E Commerce
Performance |
| Timeline |
| Enbridge |
| Real Estate E |
Enbridge and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge and Real Estate
The main advantage of trading using opposite Enbridge and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.| Enbridge vs. Suncor Energy | Enbridge vs. Toronto Dominion Bank | Enbridge vs. Bank of Nova | Enbridge vs. BCE Inc |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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