Correlation Between Pembina Pipeline and Canaf Investments
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Canaf Investments 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 Canaf Investments 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 Canaf Investments, you can compare the effects of market volatilities on Pembina Pipeline and Canaf Investments 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 Canaf Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Canaf Investments.
Diversification Opportunities for Pembina Pipeline and Canaf Investments
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pembina and Canaf is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Canaf Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canaf Investments 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 Canaf Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canaf Investments has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Canaf Investments go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Canaf Investments
Assuming the 90 days trading horizon Pembina Pipeline Corp is expected to generate 0.29 times more return on investment than Canaf Investments. However, Pembina Pipeline Corp is 3.4 times less risky than Canaf Investments. It trades about -0.19 of its potential returns per unit of risk. Canaf Investments is currently generating about -0.14 per unit of risk. If you would invest 5,779 in Pembina Pipeline Corp on September 13, 2024 and sell it today you would lose (261.00) from holding Pembina Pipeline Corp or give up 4.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Canaf Investments
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Canaf Investments |
Pembina Pipeline and Canaf Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Canaf Investments
The main advantage of trading using opposite Pembina Pipeline and Canaf Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Canaf Investments 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 Canaf Investments will offset losses from the drop in Canaf Investments' long position.| Pembina Pipeline vs. Enbridge Pref 5 | Pembina Pipeline vs. Enbridge Pref 11 | Pembina Pipeline vs. Enbridge Pref L | Pembina Pipeline vs. E Split Corp |
| Canaf Investments vs. First Majestic Silver | Canaf Investments vs. Ivanhoe Energy | Canaf Investments vs. Orezone Gold Corp | Canaf Investments vs. Faraday Copper 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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