Correlation Between Pembina Pipeline and Gibson Energy
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Gibson 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 Gibson 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 Gibson Energy, you can compare the effects of market volatilities on Pembina Pipeline and Gibson 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 Gibson Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Gibson Energy.
Diversification Opportunities for Pembina Pipeline and Gibson Energy
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pembina and Gibson is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Gibson Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gibson Energy 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 Gibson Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gibson Energy has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Gibson Energy go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Gibson Energy
Assuming the 90 days trading horizon Pembina Pipeline Corp is expected to under-perform the Gibson Energy. In addition to that, Pembina Pipeline is 1.08 times more volatile than Gibson Energy. It trades about -0.02 of its total potential returns per unit of risk. Gibson Energy is currently generating about 0.03 per unit of volatility. If you would invest 2,342 in Gibson Energy on August 28, 2024 and sell it today you would earn a total of 15.00 from holding Gibson Energy or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Gibson Energy
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Gibson Energy |
Pembina Pipeline and Gibson Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Gibson Energy
The main advantage of trading using opposite Pembina Pipeline and Gibson Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Gibson 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 Gibson Energy will offset losses from the drop in Gibson Energy's long position.| Pembina Pipeline vs. Definity Financial Corp | Pembina Pipeline vs. Canadian Imperial Bank | Pembina Pipeline vs. Financial 15 Split | Pembina Pipeline vs. Royal Bank of |
| Gibson Energy vs. Keyera Corp | Gibson Energy vs. Parkland Fuel | Gibson Energy vs. Superior Plus Corp | Gibson Energy vs. Parex Resources |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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