Correlation Between Pembina Pipeline and Commander Resources
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Commander 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 Commander 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 Commander Resources, you can compare the effects of market volatilities on Pembina Pipeline and Commander 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 Commander Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Commander Resources.
Diversification Opportunities for Pembina Pipeline and Commander Resources
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Pembina and Commander is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Commander Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commander 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 Commander Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commander Resources has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Commander Resources go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Commander Resources
Assuming the 90 days trading horizon Pembina Pipeline is expected to generate 4.52 times less return on investment than Commander Resources. But when comparing it to its historical volatility, Pembina Pipeline Corp is 8.63 times less risky than Commander Resources. It trades about 0.07 of its potential returns per unit of risk. Commander Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Commander Resources on September 12, 2024 and sell it today you would earn a total of 0.50 from holding Commander Resources or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Commander Resources
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Commander Resources |
Pembina Pipeline and Commander Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Commander Resources
The main advantage of trading using opposite Pembina Pipeline and Commander Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Commander 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 Commander Resources will offset losses from the drop in Commander Resources' 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 |
| Commander Resources vs. Pembina Pipeline Corp | Commander Resources vs. Olympia Financial Group | Commander Resources vs. Royal Bank of | Commander Resources vs. US Financial 15 |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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