Correlation Between Cebu Air and Cheniere Energy
Can any of the company-specific risk be diversified away by investing in both Cebu Air and Cheniere 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 Cebu Air and Cheniere Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cebu Air ADR and Cheniere Energy Partners, you can compare the effects of market volatilities on Cebu Air and Cheniere 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 Cebu Air with a short position of Cheniere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Cheniere Energy.
Diversification Opportunities for Cebu Air and Cheniere Energy
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cebu and Cheniere is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air ADR and Cheniere Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheniere Energy Partners and Cebu Air 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 Cebu Air ADR are associated (or correlated) with Cheniere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheniere Energy Partners has no effect on the direction of Cebu Air i.e., Cebu Air and Cheniere Energy go up and down completely randomly.
Pair Corralation between Cebu Air and Cheniere Energy
Assuming the 90 days horizon Cebu Air ADR is expected to under-perform the Cheniere Energy. In addition to that, Cebu Air is 1.77 times more volatile than Cheniere Energy Partners. It trades about -0.02 of its total potential returns per unit of risk. Cheniere Energy Partners is currently generating about 0.03 per unit of volatility. If you would invest 5,014 in Cheniere Energy Partners on September 5, 2024 and sell it today you would earn a total of 789.00 from holding Cheniere Energy Partners or generate 15.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cebu Air ADR vs. Cheniere Energy Partners
Performance |
| Timeline |
| Cebu Air ADR |
| Cheniere Energy Partners |
Cebu Air and Cheniere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cebu Air and Cheniere Energy
The main advantage of trading using opposite Cebu Air and Cheniere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air position performs unexpectedly, Cheniere 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 Cheniere Energy will offset losses from the drop in Cheniere Energy's long position.| Cebu Air vs. The Mosaic | Cebu Air vs. Siriuspoint | Cebu Air vs. Commonwealth Bank of | Cebu Air vs. LithiumBank Resources Corp |
| Cheniere Energy vs. EnLink Midstream LLC | Cheniere Energy vs. Plains GP Holdings | Cheniere Energy vs. Hess Midstream Partners | Cheniere Energy vs. Enterprise Products 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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