Correlation Between AltaGas and CBL International
Can any of the company-specific risk be diversified away by investing in both AltaGas and CBL International 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 AltaGas and CBL International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AltaGas and CBL International Limited, you can compare the effects of market volatilities on AltaGas and CBL International 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 AltaGas with a short position of CBL International. Check out your portfolio center. Please also check ongoing floating volatility patterns of AltaGas and CBL International.
Diversification Opportunities for AltaGas and CBL International
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AltaGas and CBL is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding AltaGas and CBL International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBL International and AltaGas 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 AltaGas are associated (or correlated) with CBL International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBL International has no effect on the direction of AltaGas i.e., AltaGas and CBL International go up and down completely randomly.
Pair Corralation between AltaGas and CBL International
Assuming the 90 days horizon AltaGas is expected to generate 6.56 times less return on investment than CBL International. But when comparing it to its historical volatility, AltaGas is 2.5 times less risky than CBL International. It trades about 0.04 of its potential returns per unit of risk. CBL International Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 94.00 in CBL International Limited on August 27, 2024 and sell it today you would earn a total of 5.00 from holding CBL International Limited or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AltaGas vs. CBL International Limited
Performance |
| Timeline |
| AltaGas |
| CBL International |
AltaGas and CBL International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AltaGas and CBL International
The main advantage of trading using opposite AltaGas and CBL International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AltaGas position performs unexpectedly, CBL International 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 CBL International will offset losses from the drop in CBL International's long position.| AltaGas vs. Navigator Holdings | AltaGas vs. Pembina Pipeline Corp | AltaGas vs. Marine Petroleum Trust | AltaGas vs. Dynagas LNG Partners |
| CBL International vs. Western Midstream Partners | CBL International vs. DT Midstream | CBL International vs. MPLX LP | CBL International vs. BP Prudhoe Bay |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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