Correlation Between Enbridge Energy and Cheniere Energy
Can any of the company-specific risk be diversified away by investing in both Enbridge Energy and Cheniere Energy 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 Enbridge Energy and Cheniere Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enbridge Energy Partners and Cheniere Energy Partners, you can compare the effects of market volatilities on Enbridge Energy and Cheniere Energy 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 Enbridge Energy with a short position of Cheniere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Energy and Cheniere Energy.
Diversification Opportunities for Enbridge Energy and Cheniere Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Enbridge and Cheniere is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Energy Partners and Cheniere Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheniere Energy Partners and Enbridge 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 Enbridge Energy Partners are associated (or correlated) with Cheniere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheniere Energy Partners has no effect on the direction of Enbridge Energy i.e., Enbridge Energy and Cheniere Energy go up and down completely randomly.
Pair Corralation between Enbridge Energy and Cheniere Energy
If you would invest (100.00) in Enbridge Energy Partners on January 26, 2024 and sell it today you would earn a total of 100.00 from holding Enbridge Energy Partners or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Enbridge Energy Partners vs. Cheniere Energy Partners
Performance |
| Timeline |
| Enbridge Energy Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Cheniere Energy Partners |
Enbridge Energy and Cheniere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enbridge Energy and Cheniere Energy
The main advantage of trading using opposite Enbridge Energy and Cheniere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Energy position performs unexpectedly, Cheniere Energy 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 Cheniere Energy will offset losses from the drop in Cheniere Energy's long position.| Enbridge Energy vs. Carters | Enbridge Energy vs. 51Talk Online Education | Enbridge Energy vs. Rocky Brands | Enbridge Energy vs. Pearson PLC ADR |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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