Correlation Between Cheniere Energy and Transportadora
Can any of the company-specific risk be diversified away by investing in both Cheniere Energy and Transportadora 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 Transportadora 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 Transportadora de Gas, you can compare the effects of market volatilities on Cheniere Energy and Transportadora 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 Transportadora. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheniere Energy and Transportadora.
Diversification Opportunities for Cheniere Energy and Transportadora
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cheniere and Transportadora is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy Partners and Transportadora de Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transportadora de Gas 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 Transportadora. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transportadora de Gas has no effect on the direction of Cheniere Energy i.e., Cheniere Energy and Transportadora go up and down completely randomly.
Pair Corralation between Cheniere Energy and Transportadora
Considering the 90-day investment horizon Cheniere Energy is expected to generate 1.83 times less return on investment than Transportadora. But when comparing it to its historical volatility, Cheniere Energy Partners is 2.11 times less risky than Transportadora. It trades about 0.48 of its potential returns per unit of risk. Transportadora de Gas is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 2,216 in Transportadora de Gas on August 29, 2024 and sell it today you would earn a total of 685.00 from holding Transportadora de Gas or generate 30.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cheniere Energy Partners vs. Transportadora de Gas
Performance |
| Timeline |
| Cheniere Energy Partners |
| Transportadora de Gas |
Cheniere Energy and Transportadora Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheniere Energy and Transportadora
The main advantage of trading using opposite Cheniere Energy and Transportadora positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheniere Energy position performs unexpectedly, Transportadora 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 Transportadora will offset losses from the drop in Transportadora's long position.| Cheniere Energy vs. Antero Midstream Partners | Cheniere Energy vs. Excelerate Energy | Cheniere Energy vs. Energy Transfer LP | Cheniere Energy vs. Teekay |
| Transportadora vs. Petroleo Brasileiro Petrobras | Transportadora vs. Ecopetrol SA ADR | Transportadora vs. Petrleo Brasileiro SA | Transportadora vs. Equinor ASA ADR |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |