Correlation Between Xtract One and Pembina Pipeline
Can any of the company-specific risk be diversified away by investing in both Xtract One 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 Xtract One and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtract One Technologies and Pembina Pipeline Corp, you can compare the effects of market volatilities on Xtract One 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 Xtract One with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtract One and Pembina Pipeline.
Diversification Opportunities for Xtract One and Pembina Pipeline
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Xtract and Pembina is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Xtract One 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 Xtract One 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 Xtract One 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 Xtract One i.e., Xtract One and Pembina Pipeline go up and down completely randomly.
Pair Corralation between Xtract One and Pembina Pipeline
Assuming the 90 days trading horizon Xtract One Technologies is expected to under-perform the Pembina Pipeline. In addition to that, Xtract One is 1.69 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 -0.05 per unit of volatility. If you would invest 5,843 in Pembina Pipeline Corp on September 3, 2024 and sell it today you would lose (75.00) from holding Pembina Pipeline Corp or give up 1.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtract One Technologies vs. Pembina Pipeline Corp
Performance |
| Timeline |
| Xtract One Technologies |
| Pembina Pipeline Corp |
Xtract One and Pembina Pipeline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtract One and Pembina Pipeline
The main advantage of trading using opposite Xtract One and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtract One 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.| Xtract One vs. Renoworks Software | Xtract One vs. Nicola Mining | Xtract One vs. Firan Technology Group | Xtract One vs. Sparx Technology |
| Pembina Pipeline vs. Sparx Technology | Pembina Pipeline vs. Xtract One Technologies | Pembina Pipeline vs. Chemtrade Logistics Income | Pembina Pipeline vs. Calian Technologies |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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