Correlation Between Avance Gas and Green Plains
Can any of the company-specific risk be diversified away by investing in both Avance Gas and Green Plains 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 Green Plains 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 Green Plains Partners, you can compare the effects of market volatilities on Avance Gas and Green Plains 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 Green Plains. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avance Gas and Green Plains.
Diversification Opportunities for Avance Gas and Green Plains
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Avance and Green is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Avance Gas Holding and Green Plains Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Plains 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 Green Plains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Plains Partners has no effect on the direction of Avance Gas i.e., Avance Gas and Green Plains go up and down completely randomly.
Pair Corralation between Avance Gas and Green Plains
Assuming the 90 days horizon Avance Gas Holding is expected to generate 9.11 times more return on investment than Green Plains. However, Avance Gas is 9.11 times more volatile than Green Plains Partners. It trades about 0.07 of its potential returns per unit of risk. Green Plains Partners is currently generating about 0.12 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 | 31.17% |
| Values | Daily Returns |
Avance Gas Holding vs. Green Plains Partners
Performance |
| Timeline |
| Avance Gas Holding |
| Green Plains Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Avance Gas and Green Plains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avance Gas and Green Plains
The main advantage of trading using opposite Avance Gas and Green Plains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avance Gas position performs unexpectedly, Green Plains 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 Green Plains will offset losses from the drop in Green Plains' long position.| Avance Gas vs. International Seaways | Avance Gas vs. Scorpio Tankers | Avance Gas vs. Dorian LPG | Avance Gas vs. Teekay Tankers |
| Green Plains vs. Plains All American | Green Plains vs. Genesis Energy LP | Green Plains vs. Western Midstream Partners | Green Plains vs. Hess 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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