Correlation Between Pembina Pipeline and Magna Mining
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Magna Mining 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 Magna Mining 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 Magna Mining, you can compare the effects of market volatilities on Pembina Pipeline and Magna Mining 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 Magna Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Magna Mining.
Diversification Opportunities for Pembina Pipeline and Magna Mining
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pembina and Magna is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Magna Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna Mining 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 Magna Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna Mining has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Magna Mining go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Magna Mining
Assuming the 90 days trading horizon Pembina Pipeline Corp is expected to under-perform the Magna Mining. But the stock apears to be less risky and, when comparing its historical volatility, Pembina Pipeline Corp is 4.16 times less risky than Magna Mining. The stock trades about -0.08 of its potential returns per unit of risk. The Magna Mining is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 153.00 in Magna Mining on November 4, 2024 and sell it today you would earn a total of 20.00 from holding Magna Mining or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Magna Mining
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Magna Mining |
Pembina Pipeline and Magna Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Magna Mining
The main advantage of trading using opposite Pembina Pipeline and Magna Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Magna Mining 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 Magna Mining will offset losses from the drop in Magna Mining's long position.| Pembina Pipeline vs. High Liner Foods | Pembina Pipeline vs. Ramp Metals | Pembina Pipeline vs. Atrium Mortgage Investment | Pembina Pipeline vs. Maple Leaf Foods |
| Magna Mining vs. Brunswick Exploration | Magna Mining vs. Fireweed Zinc | Magna Mining vs. Emerita Resources Corp | Magna Mining vs. InZinc Mining |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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