Correlation Between IShares Physical and Enbridge
Can any of the company-specific risk be diversified away by investing in both IShares Physical and Enbridge 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 IShares Physical and Enbridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Physical Silver and Enbridge, you can compare the effects of market volatilities on IShares Physical and Enbridge 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 IShares Physical with a short position of Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Physical and Enbridge.
Diversification Opportunities for IShares Physical and Enbridge
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IShares and Enbridge is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding iShares Physical Silver and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge and IShares Physical 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 iShares Physical Silver are associated (or correlated) with Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of IShares Physical i.e., IShares Physical and Enbridge go up and down completely randomly.
Pair Corralation between IShares Physical and Enbridge
Assuming the 90 days trading horizon IShares Physical is expected to generate 1.21 times less return on investment than Enbridge. In addition to that, IShares Physical is 1.29 times more volatile than Enbridge. It trades about 0.26 of its total potential returns per unit of risk. Enbridge is currently generating about 0.4 per unit of volatility. If you would invest 6,131 in Enbridge on November 1, 2024 and sell it today you would earn a total of 312.00 from holding Enbridge or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 61.9% |
| Values | Daily Returns |
iShares Physical Silver vs. Enbridge
Performance |
| Timeline |
| iShares Physical Silver |
| Enbridge |
IShares Physical and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Physical and Enbridge
The main advantage of trading using opposite IShares Physical and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Physical position performs unexpectedly, Enbridge 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 Enbridge will offset losses from the drop in Enbridge's long position.| IShares Physical vs. Axway Software SA | IShares Physical vs. Check Point Software | IShares Physical vs. Intermediate Capital Group | IShares Physical vs. Catena Media PLC |
| Enbridge vs. iShares Physical Silver | Enbridge vs. Anglo Asian Mining | Enbridge vs. Coeur Mining | Enbridge vs. National Beverage Corp |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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