Correlation Between Canadian Net and Pembina Pipeline

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

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

Diversification Opportunities for Canadian Net and Pembina Pipeline

0.02

Correlation Coefficient

Canadian Net  Pembina Pipeline

Significant diversification

The 3 months correlation between Canadian and Pembina is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Canadian Net Real and Pembina Pipeline Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pembina Pipeline Corp and Canadian Net 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 Canadian Net Real are associated (or correlated) with Pembina Pipeline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pembina Pipeline Corp has no effect on the direction of Canadian Net i.e., Canadian Net and Pembina Pipeline go up and down completely randomly.

Pair Corralation between Canadian Net and Pembina Pipeline

Assuming the 90 days trading horizon Canadian Net is expected to generate 4.7 times less return on investment than Pembina Pipeline. But when comparing it to its historical volatility, Canadian Net Real is 1.72 times less risky than Pembina Pipeline. It trades about 0.04 of its potential returns per unit of risk. Pembina Pipeline Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  4,958  in Pembina Pipeline Corp on July 19, 2025 and sell it today you would earn a total of  374.00  from holding Pembina Pipeline Corp or generate 7.54% return on investment over 90 days.

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

Canadian Net Real  vs.  Pembina Pipeline Corp

Canadian Net Real

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Canadian Net Real are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Canadian Net is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pembina Pipeline Corp

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Pembina Pipeline Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal essential indicators, Pembina Pipeline may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Canadian Net and Pembina Pipeline

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

The idea behind Canadian Net Real and Pembina Pipeline Corp 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.