Correlation Between Quorum Information and Enbridge Pref

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

By analyzing existing cross correlation between Quorum Information Technologies and Enbridge Pref 11, you can compare the effects of market volatilities on Quorum Information 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 Quorum Information with a short position of Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quorum Information and Enbridge Pref.

Diversification Opportunities for Quorum Information and Enbridge Pref

0.73

Correlation Coefficient

Quorum Information  Enbridge Pref

Poor diversification

The 3 months correlation between Quorum and Enbridge is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Quorum Information Technologie and Enbridge Pref 11 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref 11 and Quorum Information 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 Quorum Information Technologies 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 11 has no effect on the direction of Quorum Information i.e., Quorum Information and Enbridge Pref go up and down completely randomly.

Pair Corralation between Quorum Information and Enbridge Pref

Assuming the 90 days horizon Quorum Information is expected to generate 1.28 times less return on investment than Enbridge Pref. In addition to that, Quorum Information is 2.08 times more volatile than Enbridge Pref 11. It trades about 0.12 of its total potential returns per unit of risk. Enbridge Pref 11 is currently generating about 0.31 per unit of volatility. If you would invest  1,870  in Enbridge Pref 11 on September 28, 2024 and sell it today you would earn a total of  83.00  from holding Enbridge Pref 11 or generate 4.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Quorum Information Technologie  vs.  Enbridge Pref 11

Quorum Information

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Quorum Information Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Quorum Information showed solid returns over the last few months and may actually be approaching a breakup point.

Enbridge Pref 11

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge Pref 11 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Enbridge Pref is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Quorum Information and Enbridge Pref

The main advantage of trading using opposite Quorum Information and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quorum Information 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.

The idea behind Quorum Information Technologies and Enbridge Pref 11 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.