Correlation Between Westshore Terminals and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both Westshore Terminals and Pembina Pipeline 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 Westshore Terminals and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westshore Terminals Investment and Pembina Pipeline Corp, you can compare the effects of market volatilities on Westshore Terminals 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 Westshore Terminals with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westshore Terminals and Pembina Pipeline.
Diversification Opportunities for Westshore Terminals and Pembina Pipeline
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Westshore and Pembina is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Westshore Terminals Investment 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 Westshore Terminals 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 Westshore Terminals Investment 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 Westshore Terminals i.e., Westshore Terminals and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Westshore Terminals and Pembina Pipeline
Assuming the 90 days trading horizon Westshore Terminals Investment is expected to generate 0.84 times more return on investment than Pembina Pipeline. However, Westshore Terminals Investment is 1.2 times less risky than Pembina Pipeline. It trades about -0.07 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about -0.19 per unit of risk. 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 |
Westshore Terminals Investment vs. Pembina Pipeline Corp
Performance |
| Timeline |
| Westshore Terminals |
| Pembina Pipeline Corp |
Westshore Terminals and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westshore Terminals and Pembina Pipeline
The main advantage of trading using opposite Westshore Terminals and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westshore Terminals 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.| Westshore Terminals vs. Mullen Group | Westshore Terminals vs. Ritchie Bros Auctioneers | Westshore Terminals vs. Winpak | Westshore Terminals vs. North West |
| Pembina Pipeline vs. Enbridge Pref 5 | Pembina Pipeline vs. Enbridge Pref 11 | Pembina Pipeline vs. Enbridge Pref L | Pembina Pipeline vs. E Split 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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