Correlation Between Gildan Activewear and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both Gildan Activewear 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 Gildan Activewear and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gildan Activewear and Pembina Pipeline, you can compare the effects of market volatilities on Gildan Activewear 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 Gildan Activewear with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gildan Activewear and Pembina Pipeline.
Diversification Opportunities for Gildan Activewear and Pembina Pipeline
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gildan and Pembina is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gildan Activewear and Pembina Pipeline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline and Gildan Activewear 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 Gildan Activewear 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 has no effect on the direction of Gildan Activewear i.e., Gildan Activewear and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Gildan Activewear and Pembina Pipeline
Considering the 90-day investment horizon Gildan Activewear is expected to generate 1.53 times more return on investment than Pembina Pipeline. However, Gildan Activewear is 1.53 times more volatile than Pembina Pipeline. It trades about 0.19 of its potential returns per unit of risk. Pembina Pipeline is currently generating about 0.05 per unit of risk. If you would invest 4,030 in Gildan Activewear on November 3, 2024 and sell it today you would earn a total of 1,129 from holding Gildan Activewear or generate 28.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gildan Activewear vs. Pembina Pipeline
Performance |
| Timeline |
| Gildan Activewear |
| Pembina Pipeline |
Gildan Activewear and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gildan Activewear and Pembina Pipeline
The main advantage of trading using opposite Gildan Activewear and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gildan Activewear 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.| Gildan Activewear vs. Vince Holding Corp | Gildan Activewear vs. Ermenegildo Zegna NV | Gildan Activewear vs. Columbia Sportswear | Gildan Activewear vs. G III Apparel Group |
| Pembina Pipeline vs. Enbridge | Pembina Pipeline vs. Enbridge | Pembina Pipeline vs. Enterprise Products Partners | Pembina Pipeline vs. Williams Companies |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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