Correlation Between Pembina Pipeline and European Residential
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and European Residential 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 European Residential 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 European Residential Real, you can compare the effects of market volatilities on Pembina Pipeline and European Residential 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 European Residential. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and European Residential.
Diversification Opportunities for Pembina Pipeline and European Residential
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Pembina and European is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and European Residential Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Residential Real 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 European Residential. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Residential Real has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and European Residential go up and down completely randomly.
Pair Corralation between Pembina Pipeline and European Residential
Assuming the 90 days trading horizon Pembina Pipeline Corp is expected to under-perform the European Residential. But the preferred stock apears to be less risky and, when comparing its historical volatility, Pembina Pipeline Corp is 3.43 times less risky than European Residential. The preferred stock trades about -0.23 of its potential returns per unit of risk. The European Residential Real is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 239.00 in European Residential Real on December 5, 2024 and sell it today you would earn a total of 11.00 from holding European Residential Real or generate 4.6% 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. European Residential Real
Performance |
| Timeline |
| Pembina Pipeline Corp |
| European Residential Real |
Pembina Pipeline and European Residential Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and European Residential
The main advantage of trading using opposite Pembina Pipeline and European Residential positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, European Residential 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 European Residential will offset losses from the drop in European Residential's long position.| Pembina Pipeline vs. Pembina Pipeline Corp | ||
| Pembina Pipeline vs. Pembina Pipeline Corp | ||
| Pembina Pipeline vs. Pembina Pipeline Corp | ||
| Pembina Pipeline vs. Pembina Pipeline Corp |
| European Residential vs. BSR Real Estate | ||
| European Residential vs. Minto Apartment Real | ||
| European Residential vs. Nexus Real Estate | ||
| European Residential vs. Morguard North American |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |