Correlation Between ONEOK and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both ONEOK 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 ONEOK and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and Pembina Pipeline Corp, you can compare the effects of market volatilities on ONEOK 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 ONEOK with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and Pembina Pipeline.
Diversification Opportunities for ONEOK and Pembina Pipeline
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ONEOK and Pembina is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc 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 ONEOK 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 ONEOK Inc 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 ONEOK i.e., ONEOK and Pembina Pipeline go up and down completely randomly.
Pair Corralation between ONEOK and Pembina Pipeline
Considering the 90-day investment horizon ONEOK Inc is expected to generate 1.43 times more return on investment than Pembina Pipeline. However, ONEOK is 1.43 times more volatile than Pembina Pipeline Corp. It trades about 0.11 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about 0.05 per unit of risk. If you would invest 6,559 in ONEOK Inc on November 9, 2024 and sell it today you would earn a total of 3,023 from holding ONEOK Inc or generate 46.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ONEOK Inc vs. Pembina Pipeline Corp
Performance |
| Timeline |
| ONEOK Inc |
| Pembina Pipeline Corp |
ONEOK and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONEOK and Pembina Pipeline
The main advantage of trading using opposite ONEOK and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK 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.| ONEOK vs. Enterprise Products Partners | ONEOK vs. MPLX LP | ONEOK vs. Energy Transfer LP | ONEOK vs. Plains All American |
| 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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