Correlation Between JSC National and Enbridge
Can any of the company-specific risk be diversified away by investing in both JSC National 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 JSC National and Enbridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JSC National Atomic and Enbridge, you can compare the effects of market volatilities on JSC National 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 JSC National with a short position of Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of JSC National and Enbridge.
Diversification Opportunities for JSC National and Enbridge
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between JSC and Enbridge is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding JSC National Atomic and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge and JSC National 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 JSC National Atomic 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 JSC National i.e., JSC National and Enbridge go up and down completely randomly.
Pair Corralation between JSC National and Enbridge
Assuming the 90 days trading horizon JSC National Atomic is expected to generate 1.81 times more return on investment than Enbridge. However, JSC National is 1.81 times more volatile than Enbridge. It trades about 0.05 of its potential returns per unit of risk. Enbridge is currently generating about 0.08 per unit of risk. If you would invest 2,415 in JSC National Atomic on September 14, 2024 and sell it today you would earn a total of 1,615 from holding JSC National Atomic or generate 66.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 54.34% |
| Values | Daily Returns |
JSC National Atomic vs. Enbridge
Performance |
| Timeline |
| JSC National Atomic |
| Enbridge |
JSC National and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JSC National and Enbridge
The main advantage of trading using opposite JSC National and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JSC National 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.The idea behind JSC National Atomic and Enbridge pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Enbridge vs. Zoom Video Communications | Enbridge vs. Endo International PLC | Enbridge vs. DS Smith PLC | Enbridge vs. Rolls Royce Holdings PLC |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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