Correlation Between Pembina Pipeline and Homerun Resources
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Homerun 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 Homerun 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 Homerun Resources, you can compare the effects of market volatilities on Pembina Pipeline and Homerun 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 Homerun Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Homerun Resources.
Diversification Opportunities for Pembina Pipeline and Homerun Resources
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pembina and Homerun is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Homerun Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Homerun 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 Homerun Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Homerun Resources has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Homerun Resources go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Homerun Resources
Assuming the 90 days trading horizon Pembina Pipeline Corp is expected to generate 0.11 times more return on investment than Homerun Resources. However, Pembina Pipeline Corp is 8.85 times less risky than Homerun Resources. It trades about 0.51 of its potential returns per unit of risk. Homerun Resources is currently generating about -0.19 per unit of risk. If you would invest 2,174 in Pembina Pipeline Corp on October 12, 2024 and sell it today you would earn a total of 135.00 from holding Pembina Pipeline Corp or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Homerun Resources
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Homerun Resources |
Pembina Pipeline and Homerun Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Homerun Resources
The main advantage of trading using opposite Pembina Pipeline and Homerun Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Homerun 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 Homerun Resources will offset losses from the drop in Homerun Resources' long position.| Pembina Pipeline vs. Homerun Resources | Pembina Pipeline vs. Quipt Home Medical | Pembina Pipeline vs. Income Financial Trust | Pembina Pipeline vs. Northstar Clean Technologies |
| Homerun Resources vs. Canadian Utilities Limited | Homerun Resources vs. Economic Investment Trust | Homerun Resources vs. Canadian General Investments | Homerun Resources vs. High Liner Foods |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |