Correlation Between Pembina Pipeline and ARDAGH METAL
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and ARDAGH METAL 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 ARDAGH METAL 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 ARDAGH METAL PACDL 0001, you can compare the effects of market volatilities on Pembina Pipeline and ARDAGH METAL 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 ARDAGH METAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and ARDAGH METAL.
Diversification Opportunities for Pembina Pipeline and ARDAGH METAL
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pembina and ARDAGH is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and ARDAGH METAL PACDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARDAGH METAL PACDL 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 ARDAGH METAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARDAGH METAL PACDL has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and ARDAGH METAL go up and down completely randomly.
Pair Corralation between Pembina Pipeline and ARDAGH METAL
Assuming the 90 days horizon Pembina Pipeline Corp is expected to generate 0.32 times more return on investment than ARDAGH METAL. However, Pembina Pipeline Corp is 3.09 times less risky than ARDAGH METAL. It trades about 0.05 of its potential returns per unit of risk. ARDAGH METAL PACDL 0001 is currently generating about 0.0 per unit of risk. If you would invest 2,707 in Pembina Pipeline Corp on September 28, 2024 and sell it today you would earn a total of 767.00 from holding Pembina Pipeline Corp or generate 28.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. ARDAGH METAL PACDL 0001
Performance |
| Timeline |
| Pembina Pipeline Corp |
| ARDAGH METAL PACDL |
Pembina Pipeline and ARDAGH METAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and ARDAGH METAL
The main advantage of trading using opposite Pembina Pipeline and ARDAGH METAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, ARDAGH METAL 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 ARDAGH METAL will offset losses from the drop in ARDAGH METAL's long position.| Pembina Pipeline vs. Thai Beverage Public | Pembina Pipeline vs. SCANSOURCE | Pembina Pipeline vs. TERADATA | Pembina Pipeline vs. National Storage Affiliates |
| ARDAGH METAL vs. Ribbon Communications | ARDAGH METAL vs. MOVIE GAMES SA | ARDAGH METAL vs. Pembina Pipeline Corp | ARDAGH METAL vs. Charter Communications |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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