Correlation Between Pembina Pipeline and Dexterra
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Dexterra 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 Dexterra 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 Dexterra Group, you can compare the effects of market volatilities on Pembina Pipeline and Dexterra 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 Dexterra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Dexterra.
Diversification Opportunities for Pembina Pipeline and Dexterra
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Pembina and Dexterra is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Dexterra Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexterra Group 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 Dexterra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexterra Group has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Dexterra go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Dexterra
Assuming the 90 days trading horizon Pembina Pipeline is expected to generate 1.65 times less return on investment than Dexterra. But when comparing it to its historical volatility, Pembina Pipeline Corp is 1.72 times less risky than Dexterra. It trades about 0.07 of its potential returns per unit of risk. Dexterra Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 512.00 in Dexterra Group on November 8, 2024 and sell it today you would earn a total of 292.00 from holding Dexterra Group or generate 57.03% 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. Dexterra Group
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Dexterra Group |
Pembina Pipeline and Dexterra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Dexterra
The main advantage of trading using opposite Pembina Pipeline and Dexterra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Dexterra 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 Dexterra will offset losses from the drop in Dexterra's long position.| Pembina Pipeline vs. Champion Gaming Group | Pembina Pipeline vs. Cogeco Communications | Pembina Pipeline vs. Farstarcap Investment Corp | Pembina Pipeline vs. Canadian General Investments |
| Dexterra vs. Doman Building Materials | Dexterra vs. Topaz Energy Corp | Dexterra vs. Bird Construction | Dexterra vs. Alaris Equity Partners |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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