Correlation Between Cheniere Energy and Global Energy
Can any of the company-specific risk be diversified away by investing in both Cheniere Energy and Global 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 Cheniere Energy and Global Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheniere Energy Partners and Global Energy Metals, you can compare the effects of market volatilities on Cheniere Energy and Global 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 Cheniere Energy with a short position of Global Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheniere Energy and Global Energy.
Diversification Opportunities for Cheniere Energy and Global Energy
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cheniere and Global is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy Partners and Global Energy Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Energy Metals and Cheniere Energy 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 Cheniere Energy Partners are associated (or correlated) with Global Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Energy Metals has no effect on the direction of Cheniere Energy i.e., Cheniere Energy and Global Energy go up and down completely randomly.
Pair Corralation between Cheniere Energy and Global Energy
Considering the 90-day investment horizon Cheniere Energy Partners is expected to generate 0.17 times more return on investment than Global Energy. However, Cheniere Energy Partners is 5.88 times less risky than Global Energy. It trades about 0.09 of its potential returns per unit of risk. Global Energy Metals is currently generating about -0.01 per unit of risk. If you would invest 4,642 in Cheniere Energy Partners on September 1, 2024 and sell it today you would earn a total of 1,200 from holding Cheniere Energy Partners or generate 25.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.47% |
| Values | Daily Returns |
Cheniere Energy Partners vs. Global Energy Metals
Performance |
| Timeline |
| Cheniere Energy Partners |
| Global Energy Metals |
Cheniere Energy and Global Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheniere Energy and Global Energy
The main advantage of trading using opposite Cheniere Energy and Global Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheniere Energy position performs unexpectedly, Global 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 Global Energy will offset losses from the drop in Global Energy's long position.| Cheniere Energy vs. Plains All American | Cheniere Energy vs. Hess Midstream Partners | Cheniere Energy vs. Plains GP Holdings | Cheniere Energy vs. Antero Midstream Partners |
| Global Energy vs. ATT Inc | Global Energy vs. Merck Company | Global Energy vs. Walt Disney | Global Energy vs. Caterpillar |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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