Correlation Between Excelerate Energy and Enbridge

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

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

Diversification Opportunities for Excelerate Energy and Enbridge

-0.34

Correlation Coefficient

Excelerate Energy  Enbridge

Very good diversification

The 3 months correlation between Excelerate and Enbridge is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Excelerate Energy and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge and Excelerate Energy 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 Excelerate Energy 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 Excelerate Energy i.e., Excelerate Energy and Enbridge go up and down completely randomly.

Pair Corralation between Excelerate Energy and Enbridge

Allowing for the 90-day total investment horizon Excelerate Energy is expected to generate 1.24 times less return on investment than Enbridge. In addition to that, Excelerate Energy is 2.39 times more volatile than Enbridge. It trades about 0.13 of its total potential returns per unit of risk. Enbridge is currently generating about 0.37 per unit of volatility. If you would invest  4,177  in Enbridge on February 8, 2025 and sell it today you would earn a total of  401.00  from holding Enbridge or generate 9.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Excelerate Energy  vs.  Enbridge

Excelerate Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Excelerate Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Enbridge

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Enbridge are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Enbridge is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Excelerate Energy and Enbridge

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

The idea behind Excelerate Energy and Enbridge 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.