Correlation Between Cheniere Energy and NFT
Can any of the company-specific risk be diversified away by investing in both Cheniere Energy and NFT 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 NFT 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 NFT Limited, you can compare the effects of market volatilities on Cheniere Energy and NFT 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 NFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheniere Energy and NFT.
Diversification Opportunities for Cheniere Energy and NFT
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cheniere and NFT is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy Partners and NFT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFT Limited 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 NFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NFT Limited has no effect on the direction of Cheniere Energy i.e., Cheniere Energy and NFT go up and down completely randomly.
Pair Corralation between Cheniere Energy and NFT
Considering the 90-day investment horizon Cheniere Energy Partners is expected to generate 0.08 times more return on investment than NFT. However, Cheniere Energy Partners is 12.67 times less risky than NFT. It trades about 0.51 of its potential returns per unit of risk. NFT Limited is currently generating about -0.03 per unit of risk. If you would invest 4,861 in Cheniere Energy Partners on August 31, 2024 and sell it today you would earn a total of 843.00 from holding Cheniere Energy Partners or generate 17.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheniere Energy Partners vs. NFT Limited
Performance |
| Timeline |
| Cheniere Energy Partners |
| NFT Limited |
Cheniere Energy and NFT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheniere Energy and NFT
The main advantage of trading using opposite Cheniere Energy and NFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheniere Energy position performs unexpectedly, NFT 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 NFT will offset losses from the drop in NFT's 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 |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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