Correlation Between Pembina Pipeline and Microsoft
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Microsoft 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 Microsoft 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 Microsoft, you can compare the effects of market volatilities on Pembina Pipeline and Microsoft 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 Microsoft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Microsoft.
Diversification Opportunities for Pembina Pipeline and Microsoft
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pembina and Microsoft is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Microsoft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft 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 Microsoft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Microsoft go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Microsoft
Assuming the 90 days horizon Pembina Pipeline is expected to generate 17.35 times less return on investment than Microsoft. But when comparing it to its historical volatility, Pembina Pipeline Corp is 1.04 times less risky than Microsoft. It trades about 0.0 of its potential returns per unit of risk. Microsoft is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 38,764 in Microsoft on October 18, 2024 and sell it today you would earn a total of 2,591 from holding Microsoft or generate 6.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Microsoft
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Microsoft |
Pembina Pipeline and Microsoft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Microsoft
The main advantage of trading using opposite Pembina Pipeline and Microsoft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Microsoft 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 Microsoft will offset losses from the drop in Microsoft's long position.| Pembina Pipeline vs. Tianjin Capital Environmental | Pembina Pipeline vs. FIH MOBILE | Pembina Pipeline vs. DONGJIANG ENVIRONMENTAL H | Pembina Pipeline vs. GEELY AUTOMOBILE |
| Microsoft vs. Ribbon Communications | Microsoft vs. Pembina Pipeline Corp | Microsoft vs. ecotel communication ag | Microsoft vs. Keck Seng Investments |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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