Correlation Between Cheniere Energy and International Seaways
Can any of the company-specific risk be diversified away by investing in both Cheniere Energy and International Seaways 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 International Seaways 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 International Seaways, you can compare the effects of market volatilities on Cheniere Energy and International Seaways 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 International Seaways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheniere Energy and International Seaways.
Diversification Opportunities for Cheniere Energy and International Seaways
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cheniere and International is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy Partners and International Seaways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Seaways 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 International Seaways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Seaways has no effect on the direction of Cheniere Energy i.e., Cheniere Energy and International Seaways go up and down completely randomly.
Pair Corralation between Cheniere Energy and International Seaways
Considering the 90-day investment horizon Cheniere Energy Partners is expected to generate 0.91 times more return on investment than International Seaways. However, Cheniere Energy Partners is 1.1 times less risky than International Seaways. It trades about 0.49 of its potential returns per unit of risk. International Seaways is currently generating about -0.29 per unit of risk. If you would invest 4,788 in Cheniere Energy Partners on August 28, 2024 and sell it today you would earn a total of 702.00 from holding Cheniere Energy Partners or generate 14.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheniere Energy Partners vs. International Seaways
Performance |
| Timeline |
| Cheniere Energy Partners |
| International Seaways |
Cheniere Energy and International Seaways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheniere Energy and International Seaways
The main advantage of trading using opposite Cheniere Energy and International Seaways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheniere Energy position performs unexpectedly, International Seaways 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 International Seaways will offset losses from the drop in International Seaways' long position.| Cheniere Energy vs. Plains All American | Cheniere Energy vs. Genesis Energy LP | Cheniere Energy vs. Western Midstream Partners | Cheniere Energy vs. Hess Midstream Partners |
| International Seaways vs. Teekay Tankers | International Seaways vs. Frontline | International Seaways vs. DHT Holdings | International Seaways vs. Scorpio Tankers |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |