Correlation Between Enbridge Pref and East Side

Can any of the company-specific risk be diversified away by investing in both Enbridge Pref and East Side 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 Pref and East Side into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Enbridge Pref L and East Side Games, you can compare the effects of market volatilities on Enbridge Pref and East Side 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 Pref with a short position of East Side. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and East Side.

Diversification Opportunities for Enbridge Pref and East Side

-0.19

Correlation Coefficient

Enbridge Pref  East Side

Good diversification

The 3 months correlation between Enbridge and East is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref L and East Side Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Side Games and Enbridge Pref 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 Pref L are associated (or correlated) with East Side. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Side Games has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and East Side go up and down completely randomly.

Pair Corralation between Enbridge Pref and East Side

Assuming the 90 days trading horizon Enbridge Pref L is expected to generate 0.17 times more return on investment than East Side. However, Enbridge Pref L is 5.98 times less risky than East Side. It trades about 0.0 of its potential returns per unit of risk. East Side Games is currently generating about -0.06 per unit of risk. If you would invest  2,228  in Enbridge Pref L on September 24, 2024 and sell it today you would lose (3.00) from holding Enbridge Pref L or give up 0.13% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Enbridge Pref L  vs.  East Side Games

Enbridge Pref L

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enbridge Pref L has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Enbridge Pref is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

East Side Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days East Side Games has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Enbridge Pref and East Side

The main advantage of trading using opposite Enbridge Pref and East Side positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref position performs unexpectedly, East Side 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 East Side will offset losses from the drop in East Side's long position.

The idea behind Enbridge Pref L and East Side Games 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.