Correlation Between Strathcona Resources and Enbridge
Can any of the company-specific risk be diversified away by investing in both Strathcona Resources and Enbridge 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 Strathcona Resources and Enbridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strathcona Resources and Enbridge, you can compare the effects of market volatilities on Strathcona Resources and Enbridge 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 Strathcona Resources with a short position of Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strathcona Resources and Enbridge.
Diversification Opportunities for Strathcona Resources and Enbridge
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strathcona and Enbridge is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Strathcona Resources and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge and Strathcona Resources 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 Strathcona Resources are associated (or correlated) with Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Strathcona Resources i.e., Strathcona Resources and Enbridge go up and down completely randomly.
Pair Corralation between Strathcona Resources and Enbridge
Assuming the 90 days trading horizon Strathcona Resources is expected to generate 1.13 times less return on investment than Enbridge. In addition to that, Strathcona Resources is 2.46 times more volatile than Enbridge. It trades about 0.07 of its total potential returns per unit of risk. Enbridge is currently generating about 0.18 per unit of volatility. If you would invest 6,096 in Enbridge on July 23, 2025 and sell it today you would earn a total of 528.00 from holding Enbridge or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strathcona Resources vs. Enbridge
Performance |
| Timeline |
| Strathcona Resources |
| Enbridge |
Strathcona Resources and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strathcona Resources and Enbridge
The main advantage of trading using opposite Strathcona Resources and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strathcona Resources position performs unexpectedly, Enbridge 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 will offset losses from the drop in Enbridge's long position.| Strathcona Resources vs. MEG Energy Corp | Strathcona Resources vs. Parkland Fuel | Strathcona Resources vs. PrairieSky Royalty | Strathcona Resources vs. NexGen Energy |
| Enbridge vs. TC Energy Corp | Enbridge vs. Pembina Pipeline Corp | Enbridge vs. Canadian Natural Resources | Enbridge vs. Imperial Oil |
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 Stocks Directory module to find actively traded stocks across global markets.
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