Correlation Between Avance Gas and Dynagas LNG
Can any of the company-specific risk be diversified away by investing in both Avance Gas and Dynagas LNG 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 Avance Gas and Dynagas LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avance Gas Holding and Dynagas LNG Partners, you can compare the effects of market volatilities on Avance Gas and Dynagas LNG 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 Avance Gas with a short position of Dynagas LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avance Gas and Dynagas LNG.
Diversification Opportunities for Avance Gas and Dynagas LNG
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Avance and Dynagas is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Avance Gas Holding and Dynagas LNG Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynagas LNG Partners and Avance Gas 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 Avance Gas Holding are associated (or correlated) with Dynagas LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynagas LNG Partners has no effect on the direction of Avance Gas i.e., Avance Gas and Dynagas LNG go up and down completely randomly.
Pair Corralation between Avance Gas and Dynagas LNG
Assuming the 90 days horizon Avance Gas Holding is expected to generate 4.32 times more return on investment than Dynagas LNG. However, Avance Gas is 4.32 times more volatile than Dynagas LNG Partners. It trades about 0.07 of its potential returns per unit of risk. Dynagas LNG Partners is currently generating about 0.05 per unit of risk. If you would invest 396.00 in Avance Gas Holding on September 2, 2024 and sell it today you would earn a total of 646.00 from holding Avance Gas Holding or generate 163.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Avance Gas Holding vs. Dynagas LNG Partners
Performance |
| Timeline |
| Avance Gas Holding |
| Dynagas LNG Partners |
Avance Gas and Dynagas LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avance Gas and Dynagas LNG
The main advantage of trading using opposite Avance Gas and Dynagas LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avance Gas position performs unexpectedly, Dynagas LNG 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 Dynagas LNG will offset losses from the drop in Dynagas LNG's long position.| Avance Gas vs. International Seaways | Avance Gas vs. Scorpio Tankers | Avance Gas vs. Dorian LPG | Avance Gas vs. Teekay Tankers |
| Dynagas LNG vs. Plains All American | Dynagas LNG vs. Hess Midstream Partners | Dynagas LNG vs. Plains GP Holdings | Dynagas LNG vs. Antero Midstream Partners |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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