Correlation Between Joint Stock and Enbridge
Can any of the company-specific risk be diversified away by investing in both Joint Stock 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 Joint Stock and Enbridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Joint Stock and Enbridge, you can compare the effects of market volatilities on Joint Stock 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 Joint Stock with a short position of Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Joint Stock and Enbridge.
Diversification Opportunities for Joint Stock and Enbridge
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Joint and Enbridge is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Joint Stock and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge and Joint Stock 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 Joint Stock 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 Joint Stock i.e., Joint Stock and Enbridge go up and down completely randomly.
Pair Corralation between Joint Stock and Enbridge
Given the investment horizon of 90 days Joint Stock is expected to generate 2.59 times more return on investment than Enbridge. However, Joint Stock is 2.59 times more volatile than Enbridge. It trades about 0.05 of its potential returns per unit of risk. Enbridge is currently generating about 0.09 per unit of risk. If you would invest 8,824 in Joint Stock on September 12, 2024 and sell it today you would earn a total of 1,929 from holding Joint Stock or generate 21.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.13% |
| Values | Daily Returns |
Joint Stock vs. Enbridge
Performance |
| Timeline |
| Joint Stock |
| Enbridge |
Joint Stock and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Joint Stock and Enbridge
The main advantage of trading using opposite Joint Stock and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Joint Stock 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.| Joint Stock vs. SentinelOne | Joint Stock vs. BlackBerry | Joint Stock vs. Global Blue Group | Joint Stock vs. Aurora Mobile |
| Enbridge vs. GasLog Partners LP | Enbridge vs. GasLog Partners LP | Enbridge vs. NGL Energy Partners | Enbridge vs. Seapeak LLC |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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