Correlation Between Enbridge H and Fiera Capital

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

By analyzing existing cross correlation between Enbridge H Cum and Fiera Capital, you can compare the effects of market volatilities on Enbridge H and Fiera Capital 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 H with a short position of Fiera Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge H and Fiera Capital.

Diversification Opportunities for Enbridge H and Fiera Capital

-0.48

Correlation Coefficient

Enbridge H  Fiera Capital

Very good diversification

The 3 months correlation between Enbridge and Fiera is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge H Cum and Fiera Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiera Capital and Enbridge H 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 H Cum are associated (or correlated) with Fiera Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiera Capital has no effect on the direction of Enbridge H i.e., Enbridge H and Fiera Capital go up and down completely randomly.

Pair Corralation between Enbridge H and Fiera Capital

Assuming the 90 days trading horizon Enbridge H is expected to generate 8.42 times less return on investment than Fiera Capital. But when comparing it to its historical volatility, Enbridge H Cum is 5.66 times less risky than Fiera Capital. It trades about 0.07 of its potential returns per unit of risk. Fiera Capital is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  774.00  in Fiera Capital on September 24, 2024 and sell it today you would earn a total of  110.00  from holding Fiera Capital or generate 14.21% return on investment over 90 days.

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

Enbridge H Cum  vs.  Fiera Capital

Enbridge H Cum

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge H Cum are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Enbridge H is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Fiera Capital

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fiera Capital are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Fiera Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enbridge H and Fiera Capital

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

The idea behind Enbridge H Cum and Fiera Capital 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.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.