Correlation Between Entree Resources and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both Entree Resources and Pembina Pipeline 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 Entree Resources and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entree Resources and Pembina Pipeline Corp, you can compare the effects of market volatilities on Entree Resources and Pembina Pipeline 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 Entree Resources with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entree Resources and Pembina Pipeline.
Diversification Opportunities for Entree Resources and Pembina Pipeline
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Entree and Pembina is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Entree Resources and Pembina Pipeline Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline Corp and Entree Resources 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 Entree Resources are associated (or correlated) with Pembina Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembina Pipeline Corp has no effect on the direction of Entree Resources i.e., Entree Resources and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Entree Resources and Pembina Pipeline
Assuming the 90 days trading horizon Entree Resources is expected to generate 7.04 times more return on investment than Pembina Pipeline. However, Entree Resources is 7.04 times more volatile than Pembina Pipeline Corp. It trades about 0.09 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about 0.21 per unit of risk. If you would invest 185.00 in Entree Resources on September 1, 2024 and sell it today you would earn a total of 13.00 from holding Entree Resources or generate 7.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Entree Resources vs. Pembina Pipeline Corp
Performance |
| Timeline |
| Entree Resources |
| Pembina Pipeline Corp |
Entree Resources and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entree Resources and Pembina Pipeline
The main advantage of trading using opposite Entree Resources and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entree Resources position performs unexpectedly, Pembina Pipeline 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 Pembina Pipeline will offset losses from the drop in Pembina Pipeline's long position.| Entree Resources vs. Solitario Exploration Royalty | Entree Resources vs. Globex Mining Enterprises | Entree Resources vs. Northcliff Resources | Entree Resources vs. St Augustine Gold |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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