Correlation Between Suburban Propane and ENBRIDGE

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

By analyzing existing cross correlation between Suburban Propane Partners and ENBRIDGE INC 55, you can compare the effects of market volatilities on Suburban Propane 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 Suburban Propane with a short position of ENBRIDGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suburban Propane and ENBRIDGE.

Diversification Opportunities for Suburban Propane and ENBRIDGE

-0.41

Correlation Coefficient

Suburban Propane  ENBRIDGE

Very good diversification

The 3 months correlation between Suburban and ENBRIDGE is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Suburban Propane Partners and ENBRIDGE INC 55 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENBRIDGE INC 55 and Suburban Propane 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 Suburban Propane Partners 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 INC 55 has no effect on the direction of Suburban Propane i.e., Suburban Propane and ENBRIDGE go up and down completely randomly.

Pair Corralation between Suburban Propane and ENBRIDGE

Considering the 90-day investment horizon Suburban Propane Partners is expected to generate 1.26 times more return on investment than ENBRIDGE. However, Suburban Propane is 1.26 times more volatile than ENBRIDGE INC 55. It trades about 0.01 of its potential returns per unit of risk. ENBRIDGE INC 55 is currently generating about 0.0 per unit of risk. If you would invest  1,890  in Suburban Propane Partners on September 12, 2024 and sell it today you would lose (6.00) from holding Suburban Propane Partners or give up 0.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	63.64%
Values	Daily Returns

Suburban Propane Partners  vs.  ENBRIDGE INC 55

Suburban Propane Partners

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Suburban Propane Partners are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Suburban Propane may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ENBRIDGE INC 55

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ENBRIDGE INC 55 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for ENBRIDGE INC 55 investors.

Pair Trading with Suburban Propane and ENBRIDGE

The main advantage of trading using opposite Suburban Propane and ENBRIDGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suburban Propane 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.

The idea behind Suburban Propane Partners and ENBRIDGE INC 55 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..