Correlation Between Imperial Oil and Emera
Can any of the company-specific risk be diversified away by investing in both Imperial Oil and Emera 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 Imperial Oil and Emera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Imperial Oil and Emera Inc, you can compare the effects of market volatilities on Imperial Oil and Emera 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 Imperial Oil with a short position of Emera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Oil and Emera.
Diversification Opportunities for Imperial Oil and Emera
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Imperial and Emera is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Oil and Emera Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emera Inc and Imperial Oil 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 Imperial Oil are associated (or correlated) with Emera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emera Inc has no effect on the direction of Imperial Oil i.e., Imperial Oil and Emera go up and down completely randomly.
Pair Corralation between Imperial Oil and Emera
Assuming the 90 days trading horizon Imperial Oil is expected to under-perform the Emera. In addition to that, Imperial Oil is 2.32 times more volatile than Emera Inc. It trades about -0.07 of its total potential returns per unit of risk. Emera Inc is currently generating about 0.35 per unit of volatility. If you would invest 5,428 in Emera Inc on November 29, 2024 and sell it today you would earn a total of 382.00 from holding Emera Inc or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Imperial Oil vs. Emera Inc
Performance |
| Timeline |
| Imperial Oil |
| Emera Inc |
Imperial Oil and Emera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Imperial Oil and Emera
The main advantage of trading using opposite Imperial Oil and Emera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Imperial Oil position performs unexpectedly, Emera 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 Emera will offset losses from the drop in Emera's long position.| Imperial Oil vs. Canadian Natural Resources | Imperial Oil vs. Cenovus Energy | Imperial Oil vs. TC Energy Corp | Imperial Oil vs. Suncor Energy |
| Emera vs. Fortis Inc | Emera vs. Canadian Utilities Limited | Emera vs. TC Energy Corp | Emera vs. Capital Power |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |