Correlation Between Atlantica Sustainable and NGL Energy
Can any of the company-specific risk be diversified away by investing in both Atlantica Sustainable and NGL Energy 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 Atlantica Sustainable and NGL Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantica Sustainable Infrastructure and NGL Energy Partners, you can compare the effects of market volatilities on Atlantica Sustainable and NGL Energy 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 Atlantica Sustainable with a short position of NGL Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantica Sustainable and NGL Energy.
Diversification Opportunities for Atlantica Sustainable and NGL Energy
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Atlantica and NGL is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Atlantica Sustainable Infrastr and NGL Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGL Energy Partners and Atlantica Sustainable 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 Atlantica Sustainable Infrastructure are associated (or correlated) with NGL Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGL Energy Partners has no effect on the direction of Atlantica Sustainable i.e., Atlantica Sustainable and NGL Energy go up and down completely randomly.
Pair Corralation between Atlantica Sustainable and NGL Energy
Allowing for the 90-day total investment horizon Atlantica Sustainable Infrastructure is expected to generate 0.07 times more return on investment than NGL Energy. However, Atlantica Sustainable Infrastructure is 15.05 times less risky than NGL Energy. It trades about 0.12 of its potential returns per unit of risk. NGL Energy Partners is currently generating about -0.04 per unit of risk. If you would invest 2,134 in Atlantica Sustainable Infrastructure on September 2, 2024 and sell it today you would earn a total of 60.00 from holding Atlantica Sustainable Infrastructure or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlantica Sustainable Infrastr vs. NGL Energy Partners
Performance |
| Timeline |
| Atlantica Sustainable |
| NGL Energy Partners |
Atlantica Sustainable and NGL Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantica Sustainable and NGL Energy
The main advantage of trading using opposite Atlantica Sustainable and NGL Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantica Sustainable position performs unexpectedly, NGL Energy 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 NGL Energy will offset losses from the drop in NGL Energy's long position.| Atlantica Sustainable vs. Clearway Energy | Atlantica Sustainable vs. Brookfield Renewable Corp | Atlantica Sustainable vs. Nextera Energy Partners | Atlantica Sustainable vs. Brookfield Renewable Partners |
| NGL Energy vs. NGL Energy Partners | NGL Energy vs. Dynagas LNG Partners | NGL Energy vs. Martin Midstream Partners | NGL Energy vs. Kinetik Holdings |
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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