Correlation Between Pembina Pipeline and THRACE PLASTICS

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

By analyzing existing cross correlation between Pembina Pipeline Corp and THRACE PLASTICS, you can compare the effects of market volatilities on Pembina Pipeline and THRACE PLASTICS 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 Pembina Pipeline with a short position of THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and THRACE PLASTICS.

Diversification Opportunities for Pembina Pipeline and THRACE PLASTICS

-0.52

Correlation Coefficient

Pembina Pipeline  THRACE PLASTICS

Excellent diversification

The 3 months correlation between Pembina and THRACE is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS and Pembina Pipeline 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 Pembina Pipeline Corp are associated (or correlated) with THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and THRACE PLASTICS go up and down completely randomly.

Pair Corralation between Pembina Pipeline and THRACE PLASTICS

Assuming the 90 days horizon Pembina Pipeline Corp is expected to under-perform the THRACE PLASTICS. In addition to that, Pembina Pipeline is 1.02 times more volatile than THRACE PLASTICS. It trades about -0.06 of its total potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.07 per unit of volatility. If you would invest  377.00  in THRACE PLASTICS on April 24, 2025 and sell it today you would earn a total of  20.00  from holding THRACE PLASTICS or generate 5.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Pembina Pipeline Corp  vs.  THRACE PLASTICS

Pembina Pipeline Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pembina Pipeline Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Pembina Pipeline is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

THRACE PLASTICS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in THRACE PLASTICS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, THRACE PLASTICS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Pembina Pipeline and THRACE PLASTICS

The main advantage of trading using opposite Pembina Pipeline and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS's long position.

The idea behind Pembina Pipeline Corp and THRACE PLASTICS 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.