Correlation Between Pembina Pipeline and Westshore Terminals
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Westshore Terminals 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 Westshore Terminals 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 Westshore Terminals Investment, you can compare the effects of market volatilities on Pembina Pipeline and Westshore Terminals 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 Westshore Terminals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Westshore Terminals.
Diversification Opportunities for Pembina Pipeline and Westshore Terminals
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Pembina and Westshore is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Westshore Terminals Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westshore Terminals 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 Westshore Terminals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westshore Terminals has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Westshore Terminals go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Westshore Terminals
Assuming the 90 days trading horizon Pembina Pipeline Corp is expected to under-perform the Westshore Terminals. In addition to that, Pembina Pipeline is 1.2 times more volatile than Westshore Terminals Investment. It trades about -0.19 of its total potential returns per unit of risk. Westshore Terminals Investment is currently generating about -0.07 per unit of volatility. If you would invest 2,367 in Westshore Terminals Investment on September 13, 2024 and sell it today you would lose (34.00) from holding Westshore Terminals Investment or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline Corp vs. Westshore Terminals Investment
Performance |
| Timeline |
| Pembina Pipeline Corp |
| Westshore Terminals |
Pembina Pipeline and Westshore Terminals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Westshore Terminals
The main advantage of trading using opposite Pembina Pipeline and Westshore Terminals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Westshore Terminals 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 Westshore Terminals will offset losses from the drop in Westshore Terminals' 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 |
| Westshore Terminals vs. Mullen Group | Westshore Terminals vs. Ritchie Bros Auctioneers | Westshore Terminals vs. Winpak | Westshore Terminals vs. North West |
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.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |