Correlation Between Pembina Pipeline and Legrand SA
Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline and Legrand SA 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 Legrand SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pembina Pipeline and Legrand SA, you can compare the effects of market volatilities on Pembina Pipeline and Legrand SA 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 Legrand SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Legrand SA.
Diversification Opportunities for Pembina Pipeline and Legrand SA
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pembina and Legrand is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline and Legrand SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legrand SA 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 are associated (or correlated) with Legrand SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legrand SA has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Legrand SA go up and down completely randomly.
Pair Corralation between Pembina Pipeline and Legrand SA
Assuming the 90 days horizon Pembina Pipeline is expected to generate 0.27 times more return on investment than Legrand SA. However, Pembina Pipeline is 3.72 times less risky than Legrand SA. It trades about 0.03 of its potential returns per unit of risk. Legrand SA is currently generating about 0.01 per unit of risk. If you would invest 1,736 in Pembina Pipeline on September 4, 2025 and sell it today you would earn a total of 19.00 from holding Pembina Pipeline or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pembina Pipeline vs. Legrand SA
Performance |
| Timeline |
| Pembina Pipeline |
| Legrand SA |
Pembina Pipeline and Legrand SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pembina Pipeline and Legrand SA
The main advantage of trading using opposite Pembina Pipeline and Legrand SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline position performs unexpectedly, Legrand SA 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 Legrand SA will offset losses from the drop in Legrand SA's long position.| Pembina Pipeline vs. Enbridge | Pembina Pipeline vs. Enbridge | Pembina Pipeline vs. Williams Companies | Pembina Pipeline vs. Enterprise Products Partners |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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