Correlation Between Crestwood Equity and Magellan Midstream
Can any of the company-specific risk be diversified away by investing in both Crestwood Equity and Magellan Midstream 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 Crestwood Equity and Magellan Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crestwood Equity Partners and Magellan Midstream Partners, you can compare the effects of market volatilities on Crestwood Equity and Magellan Midstream 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 Crestwood Equity with a short position of Magellan Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crestwood Equity and Magellan Midstream.
Diversification Opportunities for Crestwood Equity and Magellan Midstream
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Crestwood and Magellan is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Crestwood Equity Partners and Magellan Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Midstream and Crestwood Equity 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 Crestwood Equity Partners are associated (or correlated) with Magellan Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Midstream has no effect on the direction of Crestwood Equity i.e., Crestwood Equity and Magellan Midstream go up and down completely randomly.
Pair Corralation between Crestwood Equity and Magellan Midstream
If you would invest 6,551 in Magellan Midstream Partners on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Magellan Midstream Partners or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crestwood Equity Partners vs. Magellan Midstream Partners
Performance |
| Timeline |
| Crestwood Equity Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Magellan Midstream |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Crestwood Equity and Magellan Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crestwood Equity and Magellan Midstream
The main advantage of trading using opposite Crestwood Equity and Magellan Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crestwood Equity position performs unexpectedly, Magellan Midstream 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 Magellan Midstream will offset losses from the drop in Magellan Midstream's long position.| Crestwood Equity vs. Western Midstream Partners | Crestwood Equity vs. DT Midstream | Crestwood Equity vs. MPLX LP | Crestwood Equity vs. Enterprise Products Partners |
| Magellan Midstream vs. Kinder Morgan | Magellan Midstream vs. Enterprise Products Partners | Magellan Midstream vs. Williams Companies | Magellan Midstream vs. MPLX LP |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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