Correlation Between Economic Investment and Enbridge
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By analyzing existing cross correlation between Economic Investment Trust and Enbridge Pref 5, you can compare the effects of market volatilities on Economic Investment and Enbridge 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 Economic Investment with a short position of Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Economic Investment and Enbridge.
Diversification Opportunities for Economic Investment and Enbridge
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Economic and Enbridge is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Economic Investment Trust and Enbridge Pref 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 5 and Economic Investment 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 Economic Investment Trust are associated (or correlated) with Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge Pref 5 has no effect on the direction of Economic Investment i.e., Economic Investment and Enbridge go up and down completely randomly.
Pair Corralation between Economic Investment and Enbridge
Assuming the 90 days trading horizon Economic Investment is expected to generate 1.27 times less return on investment than Enbridge. In addition to that, Economic Investment is 1.77 times more volatile than Enbridge Pref 5. It trades about 0.1 of its total potential returns per unit of risk. Enbridge Pref 5 is currently generating about 0.22 per unit of volatility. If you would invest 2,255 in Enbridge Pref 5 on September 8, 2024 and sell it today you would earn a total of 142.00 from holding Enbridge Pref 5 or generate 6.3% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.46% |
Values | Daily Returns |
Economic Investment Trust vs. Enbridge Pref 5
Performance |
Timeline |
Economic Investment Trust |
Enbridge Pref 5 |
Economic Investment and Enbridge Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Economic Investment and Enbridge
The main advantage of trading using opposite Economic Investment and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Economic Investment position performs unexpectedly, Enbridge 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 Enbridge will offset losses from the drop in Enbridge's long position.Economic Investment vs. Uniteds Limited | Economic Investment vs. E L Financial Corp | Economic Investment vs. Canadian General Investments | Economic Investment vs. Clairvest Group |
Enbridge vs. Canlan Ice Sports | Enbridge vs. Champion Gaming Group | Enbridge vs. Bragg Gaming Group | Enbridge vs. Lion One Metals |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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