Correlation Between Falcon Energy and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both Falcon Energy 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 Falcon Energy and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Falcon Energy Materials and Pembina Pipeline Corp, you can compare the effects of market volatilities on Falcon Energy 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 Falcon Energy with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Falcon Energy and Pembina Pipeline.
Diversification Opportunities for Falcon Energy and Pembina Pipeline
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Falcon and Pembina is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Falcon Energy Materials 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 Falcon Energy 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 Falcon Energy Materials 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 Falcon Energy i.e., Falcon Energy and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Falcon Energy and Pembina Pipeline
Assuming the 90 days trading horizon Falcon Energy Materials is expected to under-perform the Pembina Pipeline. In addition to that, Falcon Energy is 3.0 times more volatile than Pembina Pipeline Corp. It trades about -0.23 of its total potential returns per unit of risk. Pembina Pipeline Corp is currently generating about -0.32 per unit of volatility. If you would invest 5,876 in Pembina Pipeline Corp on September 15, 2024 and sell it today you would lose (415.00) from holding Pembina Pipeline Corp or give up 7.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Falcon Energy Materials vs. Pembina Pipeline Corp
Performance |
| Timeline |
| Falcon Energy Materials |
| Pembina Pipeline Corp |
Falcon Energy and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Falcon Energy and Pembina Pipeline
The main advantage of trading using opposite Falcon Energy and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Falcon Energy 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.| Falcon Energy vs. Teck Resources Limited | Falcon Energy vs. Ivanhoe Mines | Falcon Energy vs. Filo Mining Corp | Falcon Energy vs. Calibre Mining Corp |
| Pembina Pipeline vs. Enbridge Pref 5 | Pembina Pipeline vs. Enbridge Pref 11 | Pembina Pipeline vs. Enbridge Pref L | Pembina Pipeline vs. E Split Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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