Correlation Between NYSE Composite and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Pembina Pipeline Corp, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Pembina Pipeline.
Diversification Opportunities for NYSE Composite and Pembina Pipeline
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Pembina is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Pembina Pipeline go up and down completely randomly.
Pair Corralation between NYSE Composite and Pembina Pipeline
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.49 times more return on investment than Pembina Pipeline. However, NYSE Composite is 2.05 times less risky than Pembina Pipeline. It trades about 0.24 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about -0.04 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 67,069 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Pembina Pipeline Corp
Performance |
| Timeline |
NYSE Composite and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Pembina Pipeline Corp
Pair trading matchups for Pembina Pipeline
Pair Trading with NYSE Composite and Pembina Pipeline
The main advantage of trading using opposite NYSE Composite and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| Pembina Pipeline vs. LTC Properties | Pembina Pipeline vs. Main Street Capital | Pembina Pipeline vs. STAG Industrial | Pembina Pipeline vs. Gladstone Investment |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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