Correlation Between Pembina Pipeline and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Automatic Data 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 Automatic Data 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 Automatic Data Processing, you can compare the effects of market volatilities on Pembina Pipeline and Automatic Data 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 Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Automatic Data.
Diversification Opportunities for Pembina Pipeline and Automatic Data
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pembina and Automatic is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing 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 Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Automatic Data go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Automatic Data
Assuming the 90 days horizon Pembina Pipeline is expected to generate 28.74 times less return on investment than Automatic Data. In addition to that, Pembina Pipeline is 1.11 times more volatile than Automatic Data Processing. It trades about 0.0 of its total potential returns per unit of risk. Automatic Data Processing is currently generating about 0.16 per unit of volatility. If you would invest 24,474 in Automatic Data Processing on December 4, 2024 and sell it today you would earn a total of 5,656 from holding Automatic Data Processing or generate 23.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Automatic Data Processing
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Automatic Data Processing |
Pembina Pipeline and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Automatic Data
The main advantage of trading using opposite Pembina Pipeline and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.| Pembina Pipeline vs. DEVRY EDUCATION GRP | Pembina Pipeline vs. DeVry Education Group | Pembina Pipeline vs. ULTRA CLEAN HLDGS | Pembina Pipeline vs. G8 EDUCATION |
| Automatic Data vs. Direct Line Insurance | Automatic Data vs. Aegean Airlines SA | Automatic Data vs. CHIBA BANK | Automatic Data vs. Nok Airlines PCL |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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