Correlation Between TAG Oil and Enbridge Pref
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By analyzing existing cross correlation between TAG Oil and Enbridge Pref 5, you can compare the effects of market volatilities on TAG Oil 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 TAG Oil with a short position of Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAG Oil and Enbridge Pref.
Diversification Opportunities for TAG Oil and Enbridge Pref
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TAG and Enbridge is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding TAG Oil and Enbridge Pref 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 5 and TAG Oil 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 TAG Oil 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 5 has no effect on the direction of TAG Oil i.e., TAG Oil and Enbridge Pref go up and down completely randomly.
Pair Corralation between TAG Oil and Enbridge Pref
Assuming the 90 days horizon TAG Oil is expected to under-perform the Enbridge Pref. In addition to that, TAG Oil is 21.47 times more volatile than Enbridge Pref 5. It trades about -0.18 of its total potential returns per unit of risk. Enbridge Pref 5 is currently generating about 0.15 per unit of volatility. If you would invest 2,350 in Enbridge Pref 5 on September 13, 2024 and sell it today you would earn a total of 44.00 from holding Enbridge Pref 5 or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
TAG Oil vs. Enbridge Pref 5
Performance |
| Timeline |
| TAG Oil |
| Enbridge Pref 5 |
TAG Oil and Enbridge Pref Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAG Oil and Enbridge Pref
The main advantage of trading using opposite TAG Oil and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAG Oil 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.| TAG Oil vs. Gear Energy | TAG Oil vs. Journey Energy | TAG Oil vs. Yangarra Resources | TAG Oil vs. Obsidian Energy |
| Enbridge Pref vs. Rogers Communications | Enbridge Pref vs. Jamieson Wellness | Enbridge Pref vs. Bausch Health Companies | Enbridge Pref vs. Canadian General Investments |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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