Correlation Between Enbridge and Banpu PCL
Can any of the company-specific risk be diversified away by investing in both Enbridge and Banpu PCL 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 Enbridge and Banpu PCL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enbridge and Banpu PCL, you can compare the effects of market volatilities on Enbridge and Banpu PCL 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 Enbridge with a short position of Banpu PCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge and Banpu PCL.
Diversification Opportunities for Enbridge and Banpu PCL
Pay attention - limited upside
The 3 months correlation between Enbridge and Banpu is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge and Banpu PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banpu PCL and Enbridge 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 Enbridge are associated (or correlated) with Banpu PCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banpu PCL has no effect on the direction of Enbridge i.e., Enbridge and Banpu PCL go up and down completely randomly.
Pair Corralation between Enbridge and Banpu PCL
Assuming the 90 days horizon Enbridge is expected to generate 0.25 times more return on investment than Banpu PCL. However, Enbridge is 3.99 times less risky than Banpu PCL. It trades about 0.14 of its potential returns per unit of risk. Banpu PCL is currently generating about -0.05 per unit of risk. If you would invest 3,539 in Enbridge on September 23, 2024 and sell it today you would earn a total of 408.00 from holding Enbridge or generate 11.53% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Enbridge vs. Banpu PCL
Performance |
Timeline |
Enbridge |
Banpu PCL |
Enbridge and Banpu PCL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enbridge and Banpu PCL
The main advantage of trading using opposite Enbridge and Banpu PCL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge position performs unexpectedly, Banpu PCL 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 Banpu PCL will offset losses from the drop in Banpu PCL's long position.Enbridge vs. Cheniere Energy | Enbridge vs. The Williams Companies | Enbridge vs. ONEOK Inc | Enbridge vs. Pembina Pipeline Corp |
Banpu PCL vs. CHINA SHENHUA ENA | Banpu PCL vs. China Coal Energy | Banpu PCL vs. Yancoal Australia | Banpu PCL vs. CONSOL Energy |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |