Correlation Between High Liner and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both High Liner 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 High Liner and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Liner Foods and Pembina Pipeline Corp, you can compare the effects of market volatilities on High Liner 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 High Liner with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Pembina Pipeline.
Diversification Opportunities for High Liner and Pembina Pipeline
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between High and Pembina is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding High Liner 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 High Liner 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 High Liner 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 High Liner i.e., High Liner and Pembina Pipeline go up and down completely randomly.
Pair Corralation between High Liner and Pembina Pipeline
Assuming the 90 days trading horizon High Liner Foods is expected to generate 1.25 times more return on investment than Pembina Pipeline. However, High Liner is 1.25 times more volatile than Pembina Pipeline Corp. It trades about 0.0 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about -0.02 per unit of risk. If you would invest 1,567 in High Liner Foods on November 8, 2024 and sell it today you would lose (2.00) from holding High Liner Foods or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. Pembina Pipeline Corp
Performance |
| Timeline |
| High Liner Foods |
| Pembina Pipeline Corp |
High Liner and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Pembina Pipeline
The main advantage of trading using opposite High Liner and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner 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.| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Maple Leaf Foods | High Liner vs. Premium Brands Holdings |
| Pembina Pipeline vs. Champion Gaming Group | Pembina Pipeline vs. Cogeco Communications | Pembina Pipeline vs. Farstarcap Investment Corp | Pembina Pipeline vs. Canadian General Investments |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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