Correlation Between Pembina Pipeline and Microsoft CDR

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

By analyzing existing cross correlation between Pembina Pipeline Corp and Microsoft CDR, you can compare the effects of market volatilities on Pembina Pipeline and Microsoft CDR 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 Microsoft CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and Microsoft CDR.

Diversification Opportunities for Pembina Pipeline and Microsoft CDR

-0.03

Correlation Coefficient

Pembina Pipeline  Microsoft CDR

Good diversification

The 3 months correlation between Pembina and Microsoft is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and Microsoft CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microsoft CDR 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 Corp are associated (or correlated) with Microsoft CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microsoft CDR has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and Microsoft CDR go up and down completely randomly.

Pair Corralation between Pembina Pipeline and Microsoft CDR

Assuming the 90 days trading horizon Pembina Pipeline Corp is expected to generate 1.25 times more return on investment than Microsoft CDR. However, Pembina Pipeline is 1.25 times more volatile than Microsoft CDR. It trades about 0.09 of its potential returns per unit of risk. Microsoft CDR is currently generating about 0.03 per unit of risk. If you would invest  4,995  in Pembina Pipeline Corp on July 27, 2025 and sell it today you would earn a total of  331.00  from holding Pembina Pipeline Corp or generate 6.63% return on investment over 90 days.

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

Pembina Pipeline Corp  vs.  Microsoft CDR

Pembina Pipeline Corp

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Pembina Pipeline Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating essential indicators, Pembina Pipeline may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Microsoft CDR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft CDR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Microsoft CDR is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Pembina Pipeline and Microsoft CDR

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

The idea behind Pembina Pipeline Corp and Microsoft CDR 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.