Correlation Between Flowers Foods and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both Flowers Foods 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 Flowers Foods and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flowers Foods and Pembina Pipeline Corp, you can compare the effects of market volatilities on Flowers Foods 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 Flowers Foods with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flowers Foods and Pembina Pipeline.
Diversification Opportunities for Flowers Foods and Pembina Pipeline
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flowers and Pembina is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Flowers Foods 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 Flowers Foods 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 Flowers Foods 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 Flowers Foods i.e., Flowers Foods and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Flowers Foods and Pembina Pipeline
Assuming the 90 days horizon Flowers Foods is expected to under-perform the Pembina Pipeline. In addition to that, Flowers Foods is 1.22 times more volatile than Pembina Pipeline Corp. It trades about -0.15 of its total potential returns per unit of risk. Pembina Pipeline Corp is currently generating about -0.01 per unit of volatility. If you would invest 3,583 in Pembina Pipeline Corp on October 15, 2024 and sell it today you would lose (8.00) from holding Pembina Pipeline Corp or give up 0.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flowers Foods vs. Pembina Pipeline Corp
Performance |
| Timeline |
| Flowers Foods |
| Pembina Pipeline Corp |
Flowers Foods and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flowers Foods and Pembina Pipeline
The main advantage of trading using opposite Flowers Foods and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flowers Foods 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.| Flowers Foods vs. MAGNUM MINING EXP | Flowers Foods vs. ARDAGH METAL PACDL 0001 | Flowers Foods vs. Stag Industrial | Flowers Foods vs. MCEWEN MINING INC |
| Pembina Pipeline vs. Linedata Services SA | Pembina Pipeline vs. QINGCI GAMES INC | Pembina Pipeline vs. FRACTAL GAMING GROUP | Pembina Pipeline vs. Automatic Data Processing |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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