Correlation Between Queens Road and Enbridge Pref
Can any of the company-specific risk be diversified away by investing in both Queens Road and Enbridge Pref 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 Queens Road and Enbridge Pref into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Queens Road Capital and Enbridge Pref 3, you can compare the effects of market volatilities on Queens Road and Enbridge Pref 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 Queens Road with a short position of Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Queens Road and Enbridge Pref.
Diversification Opportunities for Queens Road and Enbridge Pref
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Queens and Enbridge is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Queens Road Capital and Enbridge Pref 3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 3 and Queens Road 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 Queens Road Capital are associated (or correlated) with Enbridge Pref. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Pref 3 has no effect on the direction of Queens Road i.e., Queens Road and Enbridge Pref go up and down completely randomly.
Pair Corralation between Queens Road and Enbridge Pref
Assuming the 90 days trading horizon Queens Road Capital is expected to generate 7.01 times more return on investment than Enbridge Pref. However, Queens Road is 7.01 times more volatile than Enbridge Pref 3. It trades about 0.07 of its potential returns per unit of risk. Enbridge Pref 3 is currently generating about 0.3 per unit of risk. If you would invest 710.00 in Queens Road Capital on October 25, 2024 and sell it today you would earn a total of 24.00 from holding Queens Road Capital or generate 3.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Queens Road Capital vs. Enbridge Pref 3
Performance |
| Timeline |
| Queens Road Capital |
| Enbridge Pref 3 |
Queens Road and Enbridge Pref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Queens Road and Enbridge Pref
The main advantage of trading using opposite Queens Road and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Queens Road position performs unexpectedly, Enbridge Pref 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 Enbridge Pref will offset losses from the drop in Enbridge Pref's long position.The idea behind Queens Road Capital and Enbridge Pref 3 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Enbridge Pref vs. A W FOOD | Enbridge Pref vs. T2 Metals Corp | Enbridge Pref vs. Advent Wireless | Enbridge Pref vs. Ramp Metals |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |