Correlation Between Pembina Pipeline and COSTCO WHOLESALE
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and COSTCO WHOLESALE 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 COSTCO WHOLESALE 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 COSTCO WHOLESALE CDR, you can compare the effects of market volatilities on Pembina Pipeline and COSTCO WHOLESALE 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 COSTCO WHOLESALE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and COSTCO WHOLESALE.
Diversification Opportunities for Pembina Pipeline and COSTCO WHOLESALE
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pembina and COSTCO is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and COSTCO WHOLESALE CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSTCO WHOLESALE CDR 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 COSTCO WHOLESALE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSTCO WHOLESALE CDR has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and COSTCO WHOLESALE go up and down completely randomly.
Pair Corralation between Pembina Pipeline and COSTCO WHOLESALE
Assuming the 90 days horizon Pembina Pipeline Corp is expected to under-perform the COSTCO WHOLESALE. But the stock apears to be less risky and, when comparing its historical volatility, Pembina Pipeline Corp is 1.51 times less risky than COSTCO WHOLESALE. The stock trades about -0.19 of its potential returns per unit of risk. The COSTCO WHOLESALE CDR is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,800 in COSTCO WHOLESALE CDR on November 7, 2024 and sell it today you would earn a total of 200.00 from holding COSTCO WHOLESALE CDR or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. COSTCO WHOLESALE CDR
Performance |
| Timeline |
| Pembina Pipeline Corp |
| COSTCO WHOLESALE CDR |
Pembina Pipeline and COSTCO WHOLESALE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and COSTCO WHOLESALE
The main advantage of trading using opposite Pembina Pipeline and COSTCO WHOLESALE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, COSTCO WHOLESALE 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 COSTCO WHOLESALE will offset losses from the drop in COSTCO WHOLESALE's long position.| Pembina Pipeline vs. VELA TECHNOLPLC LS 0001 | Pembina Pipeline vs. BioNTech SE | Pembina Pipeline vs. Agilent Technologies | Pembina Pipeline vs. BANKINTER ADR 2007 |
| COSTCO WHOLESALE vs. China Resources Beer | COSTCO WHOLESALE vs. KENEDIX OFFICE INV | COSTCO WHOLESALE vs. BOSTON BEER A | COSTCO WHOLESALE vs. UNICREDIT SPA ADR |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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