Correlation Between Enbridge Pref and Lycos Energy
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By analyzing existing cross correlation between Enbridge Pref 5 and Lycos Energy, you can compare the effects of market volatilities on Enbridge Pref and Lycos 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 Pref with a short position of Lycos Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enbridge Pref and Lycos Energy.
Diversification Opportunities for Enbridge Pref and Lycos Energy
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enbridge and Lycos is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Enbridge Pref 5 and Lycos Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lycos Energy and Enbridge Pref 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 Pref 5 are associated (or correlated) with Lycos Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lycos Energy has no effect on the direction of Enbridge Pref i.e., Enbridge Pref and Lycos Energy go up and down completely randomly.
Pair Corralation between Enbridge Pref and Lycos Energy
Assuming the 90 days trading horizon Enbridge Pref 5 is expected to under-perform the Lycos Energy. But the preferred stock apears to be less risky and, when comparing its historical volatility, Enbridge Pref 5 is 7.76 times less risky than Lycos Energy. The preferred stock trades about -0.23 of its potential returns per unit of risk. The Lycos Energy is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 347.00 in Lycos Energy on March 21, 2024 and sell it today you would lose (3.00) from holding Lycos Energy or give up 0.86% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Enbridge Pref 5 vs. Lycos Energy
Performance |
Timeline |
Enbridge Pref 5 |
Lycos Energy |
Enbridge Pref and Lycos Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enbridge Pref and Lycos Energy
The main advantage of trading using opposite Enbridge Pref and Lycos Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enbridge Pref position performs unexpectedly, Lycos 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 Lycos Energy will offset losses from the drop in Lycos Energy's long position.Enbridge Pref vs. Enbridge Pref 11 | Enbridge Pref vs. Enbridge Pref L | Enbridge Pref vs. E Split Corp | Enbridge Pref vs. E Split Corp |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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