Correlation Between Pembina Pipeline and AAC TECHNOLOGHLDGADR
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR, you can compare the effects of market volatilities on Pembina Pipeline and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and AAC TECHNOLOGHLDGADR.
Diversification Opportunities for Pembina Pipeline and AAC TECHNOLOGHLDGADR
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pembina and AAC is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and AAC TECHNOLOGHLDGADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAC TECHNOLOGHLDGADR has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and AAC TECHNOLOGHLDGADR go up and down completely randomly.
Pair Corralation between Pembina Pipeline and AAC TECHNOLOGHLDGADR
Assuming the 90 days horizon Pembina Pipeline is expected to generate 2.68 times less return on investment than AAC TECHNOLOGHLDGADR. But when comparing it to its historical volatility, Pembina Pipeline Corp is 2.64 times less risky than AAC TECHNOLOGHLDGADR. It trades about 0.06 of its potential returns per unit of risk. AAC TECHNOLOGHLDGADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 199.00 in AAC TECHNOLOGHLDGADR on September 3, 2024 and sell it today you would earn a total of 211.00 from holding AAC TECHNOLOGHLDGADR or generate 106.03% 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. AAC TECHNOLOGHLDGADR
Performance |
| Timeline |
| Pembina Pipeline Corp |
| AAC TECHNOLOGHLDGADR |
Pembina Pipeline and AAC TECHNOLOGHLDGADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and AAC TECHNOLOGHLDGADR
The main advantage of trading using opposite Pembina Pipeline and AAC TECHNOLOGHLDGADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR will offset losses from the drop in AAC TECHNOLOGHLDGADR's long position.| Pembina Pipeline vs. ONEOK Inc | Pembina Pipeline vs. Superior Plus Corp | Pembina Pipeline vs. NMI Holdings | Pembina Pipeline vs. Origin Agritech |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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