Correlation Between North American and Enbridge Pref
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By analyzing existing cross correlation between North American Financial and Enbridge Pref 15, you can compare the effects of market volatilities on North American and Enbridge Pref 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 North American with a short position of Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and Enbridge Pref.
Diversification Opportunities for North American and Enbridge Pref
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between North and Enbridge is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding North American Financial and Enbridge Pref 15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 15 and North American 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 North American Financial are associated (or correlated) with Enbridge Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Pref 15 has no effect on the direction of North American i.e., North American and Enbridge Pref go up and down completely randomly.
Pair Corralation between North American and Enbridge Pref
Assuming the 90 days trading horizon North American Financial is expected to under-perform the Enbridge Pref. In addition to that, North American is 2.4 times more volatile than Enbridge Pref 15. It trades about -0.02 of its total potential returns per unit of risk. Enbridge Pref 15 is currently generating about 0.36 per unit of volatility. If you would invest 1,846 in Enbridge Pref 15 on October 11, 2024 and sell it today you would earn a total of 105.00 from holding Enbridge Pref 15 or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
North American Financial vs. Enbridge Pref 15
Performance |
| Timeline |
| North American Financial |
| Enbridge Pref 15 |
North American and Enbridge Pref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and Enbridge Pref
The main advantage of trading using opposite North American and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American position performs unexpectedly, Enbridge Pref 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 Enbridge Pref will offset losses from the drop in Enbridge Pref's long position.| North American vs. Dividend Growth Split | North American vs. Dividend 15 Split | North American vs. Financial 15 Split | North American vs. Dividend 15 Split |
| Enbridge Pref vs. Fairfax Financial Holdings | Enbridge Pref vs. T2 Metals Corp | Enbridge Pref vs. Osisko Metals | Enbridge Pref vs. North American Financial |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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