Correlation Between CBL International and Dynagas LNG
Can any of the company-specific risk be diversified away by investing in both CBL International 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 CBL International and Dynagas LNG 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 Dynagas LNG Partners, you can compare the effects of market volatilities on CBL International 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 CBL International with a short position of Dynagas LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBL International and Dynagas LNG.
Diversification Opportunities for CBL International and Dynagas LNG
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CBL and Dynagas is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CBL International Limited 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 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 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 CBL International i.e., CBL International and Dynagas LNG go up and down completely randomly.
Pair Corralation between CBL International and Dynagas LNG
Given the investment horizon of 90 days CBL International is expected to generate 2.1 times less return on investment than Dynagas LNG. But when comparing it to its historical volatility, CBL International Limited is 1.09 times less risky than Dynagas LNG. It trades about 0.15 of its potential returns per unit of risk. Dynagas LNG Partners is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 378.00 in Dynagas LNG Partners on August 31, 2024 and sell it today you would earn a total of 81.00 from holding Dynagas LNG Partners or generate 21.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CBL International Limited vs. Dynagas LNG Partners
Performance |
| Timeline |
| CBL International |
| Dynagas LNG Partners |
CBL International and Dynagas LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBL International and Dynagas LNG
The main advantage of trading using opposite CBL International and Dynagas LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBL International 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.| CBL International vs. GasLog Partners LP | CBL International vs. Dynagas LNG Partners | CBL International vs. Imperial Petroleum Preferred | CBL International vs. Imperial Petroleum |
| Dynagas LNG vs. Tidewater Midstream and | Dynagas LNG vs. Martin Midstream Partners | Dynagas LNG vs. Kinetik Holdings | Dynagas LNG 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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