Correlation Between Pembina Pipeline and LIFE +
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and LIFE + 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 Pembina Pipeline and LIFE + into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembina Pipeline Corp and LIFE BANC SPLIT, you can compare the effects of market volatilities on Pembina Pipeline and LIFE + 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 Pembina Pipeline with a short position of LIFE +. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and LIFE +.
Diversification Opportunities for Pembina Pipeline and LIFE +
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pembina and LIFE is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and LIFE BANC SPLIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE BANC SPLIT and Pembina Pipeline 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 Pembina Pipeline Corp are associated (or correlated) with LIFE +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE BANC SPLIT has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and LIFE + go up and down completely randomly.
Pair Corralation between Pembina Pipeline and LIFE +
Assuming the 90 days horizon Pembina Pipeline is expected to generate 1.59 times less return on investment than LIFE +. But when comparing it to its historical volatility, Pembina Pipeline Corp is 2.67 times less risky than LIFE +. It trades about 0.11 of its potential returns per unit of risk. LIFE BANC SPLIT is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 435.00 in LIFE BANC SPLIT on September 14, 2024 and sell it today you would earn a total of 185.00 from holding LIFE BANC SPLIT or generate 42.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. LIFE BANC SPLIT
Performance |
| Timeline |
| Pembina Pipeline Corp |
| LIFE BANC SPLIT |
Pembina Pipeline and LIFE + Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and LIFE +
The main advantage of trading using opposite Pembina Pipeline and LIFE + positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, LIFE + 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 LIFE + will offset losses from the drop in LIFE +'s long position.| Pembina Pipeline vs. LANDSEA GREEN MANAGEMENT | Pembina Pipeline vs. YOOMA WELLNESS INC | Pembina Pipeline vs. Brockhaus Capital Management | Pembina Pipeline vs. CeoTronics AG |
| LIFE + vs. AOI Electronics Co | LIFE + vs. TAL Education Group | LIFE + vs. EMBARK EDUCATION LTD | LIFE + vs. DeVry Education Group |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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