Correlation Between Parex Resources and Enbridge Pref
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By analyzing existing cross correlation between Parex Resources and Enbridge Pref 5, you can compare the effects of market volatilities on Parex Resources and Enbridge Pref 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 Parex Resources with a short position of Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parex Resources and Enbridge Pref.
Diversification Opportunities for Parex Resources and Enbridge Pref
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Parex and Enbridge is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Parex Resources 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 Parex Resources 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 Parex Resources are associated (or correlated) with Enbridge Pref. 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 Parex Resources i.e., Parex Resources and Enbridge Pref go up and down completely randomly.
Pair Corralation between Parex Resources and Enbridge Pref
Assuming the 90 days trading horizon Parex Resources is expected to under-perform the Enbridge Pref. In addition to that, Parex Resources is 8.17 times more volatile than Enbridge Pref 5. It trades about -0.14 of its total potential returns per unit of risk. Enbridge Pref 5 is currently generating about -0.07 per unit of volatility. If you would invest 2,395 in Enbridge Pref 5 on September 24, 2024 and sell it today you would lose (9.00) from holding Enbridge Pref 5 or give up 0.38% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 90.91% |
Values | Daily Returns |
Parex Resources vs. Enbridge Pref 5
Performance |
Timeline |
Parex Resources |
Enbridge Pref 5 |
Parex Resources and Enbridge Pref Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Parex Resources and Enbridge Pref
The main advantage of trading using opposite Parex Resources and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parex Resources position performs unexpectedly, Enbridge Pref 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 Pref will offset losses from the drop in Enbridge Pref's long position.Parex Resources vs. Enbridge Pref 5 | Parex Resources vs. Enbridge Pref 11 | Parex Resources vs. Enbridge Pref L | Parex Resources vs. E Split Corp |
Enbridge Pref vs. Enbridge Pref 11 | Enbridge Pref vs. Enbridge Pref L | Enbridge Pref vs. E Split Corp | Enbridge Pref vs. Sage Potash Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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