Correlation Between WELL Health and Enbridge Pref

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

By analyzing existing cross correlation between WELL Health Technologies and Enbridge Pref L, you can compare the effects of market volatilities on WELL Health 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 WELL Health with a short position of Enbridge Pref. Check out your portfolio center. Please also check ongoing floating volatility patterns of WELL Health and Enbridge Pref.

Diversification Opportunities for WELL Health and Enbridge Pref

0.55

Correlation Coefficient

WELL Health  Enbridge Pref

Very weak diversification

The 3 months correlation between WELL and Enbridge is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding WELL Health Technologies and Enbridge Pref L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge Pref L and WELL Health 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 WELL Health Technologies 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 L has no effect on the direction of WELL Health i.e., WELL Health and Enbridge Pref go up and down completely randomly.

Pair Corralation between WELL Health and Enbridge Pref

Assuming the 90 days trading horizon WELL Health Technologies is expected to generate 3.87 times more return on investment than Enbridge Pref. However, WELL Health is 3.87 times more volatile than Enbridge Pref L. It trades about 0.13 of its potential returns per unit of risk. Enbridge Pref L is currently generating about 0.21 per unit of risk. If you would invest  396.00  in WELL Health Technologies on April 24, 2025 and sell it today you would earn a total of  75.00  from holding WELL Health Technologies or generate 18.94% return on investment over 90 days.

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

WELL Health Technologies  vs.  Enbridge Pref L

WELL Health Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WELL Health Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, WELL Health displayed solid returns over the last few months and may actually be approaching a breakup point.

Enbridge Pref L

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge Pref L are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Enbridge Pref may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with WELL Health and Enbridge Pref

The main advantage of trading using opposite WELL Health and Enbridge Pref positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WELL Health 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.

The idea behind WELL Health Technologies and Enbridge Pref L 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.