Correlation Between Pembina Pipeline and Excellon Resources
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Excellon Resources 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 Excellon Resources 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 Excellon Resources, you can compare the effects of market volatilities on Pembina Pipeline and Excellon Resources 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 Excellon Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Excellon Resources.
Diversification Opportunities for Pembina Pipeline and Excellon Resources
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pembina and Excellon is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Excellon Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excellon Resources 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 Excellon Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excellon Resources has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Excellon Resources go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Excellon Resources
Assuming the 90 days trading horizon Pembina Pipeline Corp is expected to generate 0.11 times more return on investment than Excellon Resources. However, Pembina Pipeline Corp is 8.87 times less risky than Excellon Resources. It trades about 0.09 of its potential returns per unit of risk. Excellon Resources is currently generating about 0.01 per unit of risk. If you would invest 1,600 in Pembina Pipeline Corp on December 12, 2024 and sell it today you would earn a total of 643.00 from holding Pembina Pipeline Corp or generate 40.19% 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. Excellon Resources
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Excellon Resources |
Pembina Pipeline and Excellon Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Excellon Resources
The main advantage of trading using opposite Pembina Pipeline and Excellon Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Excellon Resources 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 Excellon Resources will offset losses from the drop in Excellon Resources' long position.| Pembina Pipeline vs. Pembina Pipeline Corp | ||
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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