Correlation Between Pembina Pipeline and Forum Energy
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Forum Energy 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 Forum Energy 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 Forum Energy Metals, you can compare the effects of market volatilities on Pembina Pipeline and Forum Energy 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 Forum Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Forum Energy.
Diversification Opportunities for Pembina Pipeline and Forum Energy
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Pembina and Forum is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Forum Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forum Energy Metals 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 Forum Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forum Energy Metals has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Forum Energy go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Forum Energy
Assuming the 90 days trading horizon Pembina Pipeline Corp is expected to generate 0.13 times more return on investment than Forum Energy. However, Pembina Pipeline Corp is 7.55 times less risky than Forum Energy. It trades about 0.17 of its potential returns per unit of risk. Forum Energy Metals is currently generating about -0.06 per unit of risk. If you would invest 4,890 in Pembina Pipeline Corp on September 2, 2024 and sell it today you would earn a total of 878.00 from holding Pembina Pipeline Corp or generate 17.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Forum Energy Metals
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Forum Energy Metals |
Pembina Pipeline and Forum Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Forum Energy
The main advantage of trading using opposite Pembina Pipeline and Forum Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Forum Energy 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 Forum Energy will offset losses from the drop in Forum Energy's long position.| Pembina Pipeline vs. TGS Esports | Pembina Pipeline vs. Network Media Group | Pembina Pipeline vs. Perseus Mining | Pembina Pipeline vs. Converge Technology Solutions |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |