Correlation Between Canlan Ice and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both Canlan Ice 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 Canlan Ice and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canlan Ice Sports and Pembina Pipeline Corp, you can compare the effects of market volatilities on Canlan Ice 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 Canlan Ice with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canlan Ice and Pembina Pipeline.
Diversification Opportunities for Canlan Ice and Pembina Pipeline
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Canlan and Pembina is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Canlan Ice Sports 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 Canlan Ice 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 Canlan Ice Sports 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 Canlan Ice i.e., Canlan Ice and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Canlan Ice and Pembina Pipeline
Assuming the 90 days trading horizon Canlan Ice Sports is expected to generate 0.3 times more return on investment than Pembina Pipeline. However, Canlan Ice Sports is 3.35 times less risky than Pembina Pipeline. It trades about 0.19 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 404.00 in Canlan Ice Sports on September 2, 2024 and sell it today you would earn a total of 6.00 from holding Canlan Ice Sports or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canlan Ice Sports vs. Pembina Pipeline Corp
Performance |
| Timeline |
| Canlan Ice Sports |
| Pembina Pipeline Corp |
Canlan Ice and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canlan Ice and Pembina Pipeline
The main advantage of trading using opposite Canlan Ice and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canlan Ice 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.| Canlan Ice vs. BMTC Group | Canlan Ice vs. Caldwell Partners International | Canlan Ice vs. TWC Enterprises | Canlan Ice vs. Madison Pacific Properties |
| Pembina Pipeline vs. TGS Esports | Pembina Pipeline vs. Network Media Group | Pembina Pipeline vs. Perseus Mining | Pembina Pipeline vs. Converge Technology Solutions |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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