Correlation Between CBL International and AltaGas
Can any of the company-specific risk be diversified away by investing in both CBL International and AltaGas 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 CBL International and AltaGas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBL International Limited and AltaGas, you can compare the effects of market volatilities on CBL International and AltaGas 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 CBL International with a short position of AltaGas. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBL International and AltaGas.
Diversification Opportunities for CBL International and AltaGas
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CBL and AltaGas is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding CBL International Limited and AltaGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltaGas and CBL International 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 CBL International Limited are associated (or correlated) with AltaGas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltaGas has no effect on the direction of CBL International i.e., CBL International and AltaGas go up and down completely randomly.
Pair Corralation between CBL International and AltaGas
Given the investment horizon of 90 days CBL International Limited is expected to generate 2.5 times more return on investment than AltaGas. However, CBL International is 2.5 times more volatile than AltaGas. It trades about 0.1 of its potential returns per unit of risk. AltaGas is currently generating about 0.04 per unit of risk. 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 |
CBL International Limited vs. AltaGas
Performance |
| Timeline |
| CBL International |
| AltaGas |
CBL International and AltaGas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBL International and AltaGas
The main advantage of trading using opposite CBL International and AltaGas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBL International position performs unexpectedly, AltaGas 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 AltaGas will offset losses from the drop in AltaGas' long position.| CBL International vs. Western Midstream Partners | CBL International vs. DT Midstream | CBL International vs. MPLX LP | CBL International vs. BP Prudhoe Bay |
| AltaGas vs. Navigator Holdings | AltaGas vs. Pembina Pipeline Corp | AltaGas vs. Marine Petroleum Trust | AltaGas vs. Dynagas LNG 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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