Correlation Between Northstar Clean and Pembina Pipeline
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By analyzing existing cross correlation between Northstar Clean Technologies and Pembina Pipeline Corp, you can compare the effects of market volatilities on Northstar Clean and Pembina Pipeline 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 Northstar Clean with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northstar Clean and Pembina Pipeline.
Diversification Opportunities for Northstar Clean and Pembina Pipeline
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Northstar and Pembina is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Northstar Clean Technologies and Pembina Pipeline Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline Corp and Northstar Clean 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 Northstar Clean Technologies are associated (or correlated) with Pembina Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembina Pipeline Corp has no effect on the direction of Northstar Clean i.e., Northstar Clean and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Northstar Clean and Pembina Pipeline
Assuming the 90 days trading horizon Northstar Clean Technologies is expected to under-perform the Pembina Pipeline. In addition to that, Northstar Clean is 5.97 times more volatile than Pembina Pipeline Corp. It trades about -0.1 of its total potential returns per unit of risk. Pembina Pipeline Corp is currently generating about 0.28 per unit of volatility. If you would invest 2,396 in Pembina Pipeline Corp on October 29, 2024 and sell it today you would earn a total of 52.00 from holding Pembina Pipeline Corp or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Northstar Clean Technologies vs. Pembina Pipeline Corp
Performance |
| Timeline |
| Northstar Clean Tech |
| Pembina Pipeline Corp |
Northstar Clean and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Northstar Clean and Pembina Pipeline
The main advantage of trading using opposite Northstar Clean and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Northstar Clean position performs unexpectedly, Pembina Pipeline 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 Pembina Pipeline will offset losses from the drop in Pembina Pipeline's long position.The idea behind Northstar Clean Technologies and Pembina Pipeline Corp 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.| Pembina Pipeline vs. Pembina Pipeline Corp | Pembina Pipeline vs. Pembina Pipeline Corp | Pembina Pipeline vs. Pembina Pipeline Corp | Pembina Pipeline vs. Pembina Pipeline Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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