Correlation Between TC Energy and Enbridge Pref
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By analyzing existing cross correlation between TC Energy Corp and Enbridge Pref 5, you can compare the effects of market volatilities on TC Energy 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 TC Energy with a short position of Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of TC Energy and Enbridge Pref.
Diversification Opportunities for TC Energy and Enbridge Pref
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TRP-PF and Enbridge is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding TC Energy Corp 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 TC Energy 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 TC Energy Corp 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 TC Energy i.e., TC Energy and Enbridge Pref go up and down completely randomly.
Pair Corralation between TC Energy and Enbridge Pref
Assuming the 90 days trading horizon TC Energy Corp is expected to generate 1.81 times more return on investment than Enbridge Pref. However, TC Energy is 1.81 times more volatile than Enbridge Pref 5. It trades about 0.1 of its potential returns per unit of risk. Enbridge Pref 5 is currently generating about 0.14 per unit of risk. If you would invest 1,680 in TC Energy Corp on September 25, 2024 and sell it today you would earn a total of 76.00 from holding TC Energy Corp or generate 4.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 96.88% |
Values | Daily Returns |
TC Energy Corp vs. Enbridge Pref 5
Performance |
Timeline |
TC Energy Corp |
Enbridge Pref 5 |
TC Energy and Enbridge Pref Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TC Energy and Enbridge Pref
The main advantage of trading using opposite TC Energy and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TC Energy 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.TC Energy vs. Enbridge Pref 5 | TC Energy vs. Enbridge Pref 11 | TC Energy vs. E Split Corp | TC Energy 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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