Correlation Between Pembina Pipeline and Arbor Metals
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Arbor Metals 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 Arbor Metals 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 Arbor Metals Corp, you can compare the effects of market volatilities on Pembina Pipeline and Arbor Metals 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 Arbor Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Arbor Metals.
Diversification Opportunities for Pembina Pipeline and Arbor Metals
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pembina and Arbor is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Arbor Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbor Metals Corp 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 Arbor Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbor Metals Corp has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Arbor Metals go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Arbor Metals
Assuming the 90 days trading horizon Pembina Pipeline Corp is expected to generate 0.12 times more return on investment than Arbor Metals. However, Pembina Pipeline Corp is 8.12 times less risky than Arbor Metals. It trades about 0.18 of its potential returns per unit of risk. Arbor Metals Corp is currently generating about -0.07 per unit of risk. If you would invest 3,873 in Pembina Pipeline Corp on September 4, 2024 and sell it today you would earn a total of 1,774 from holding Pembina Pipeline Corp or generate 45.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Arbor Metals Corp
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Arbor Metals Corp |
Pembina Pipeline and Arbor Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Arbor Metals
The main advantage of trading using opposite Pembina Pipeline and Arbor Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Arbor Metals 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 Arbor Metals will offset losses from the drop in Arbor Metals' long position.| Pembina Pipeline vs. Laurentian Bank | Pembina Pipeline vs. US Financial 15 | Pembina Pipeline vs. Solid Impact Investments | Pembina Pipeline vs. Canadian Imperial Bank |
| Arbor Metals vs. Kiplin Metals | Arbor Metals vs. Pure Energy Minerals | Arbor Metals vs. Noram Lithium Corp | Arbor Metals vs. Minnova Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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