Correlation Between BOEING CDR and Pembina Pipeline

Can any of the company-specific risk be diversified away by investing in both BOEING CDR 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 BOEING CDR and Pembina Pipeline into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BOEING CDR and Pembina Pipeline Corp, you can compare the effects of market volatilities on BOEING CDR 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 BOEING CDR with a short position of Pembina Pipeline. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOEING CDR and Pembina Pipeline.

Diversification Opportunities for BOEING CDR and Pembina Pipeline

-0.53

Correlation Coefficient

BOEING CDR  Pembina Pipeline

Excellent diversification

The 3 months correlation between BOEING and Pembina is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BOEING CDR 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 BOEING CDR 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 BOEING CDR 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 BOEING CDR i.e., BOEING CDR and Pembina Pipeline go up and down completely randomly.

Pair Corralation between BOEING CDR and Pembina Pipeline

Assuming the 90 days trading horizon BOEING CDR is expected to generate 2.06 times more return on investment than Pembina Pipeline. However, BOEING CDR is 2.06 times more volatile than Pembina Pipeline Corp. It trades about 0.07 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about -0.02 per unit of risk. If you would invest  2,716  in BOEING CDR on September 15, 2024 and sell it today you would earn a total of  221.00  from holding BOEING CDR or generate 8.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BOEING CDR  vs.  Pembina Pipeline Corp

BOEING CDR

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BOEING CDR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, BOEING CDR may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pembina Pipeline Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pembina Pipeline Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Pembina Pipeline is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with BOEING CDR and Pembina Pipeline

The main advantage of trading using opposite BOEING CDR and Pembina Pipeline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOEING CDR 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 BOEING CDR 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.