Correlation Between Cheniere Energy and Willamette Valley
Can any of the company-specific risk be diversified away by investing in both Cheniere Energy and Willamette Valley 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 Willamette Valley 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 Willamette Valley Vineyards, you can compare the effects of market volatilities on Cheniere Energy and Willamette Valley 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 Willamette Valley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheniere Energy and Willamette Valley.
Diversification Opportunities for Cheniere Energy and Willamette Valley
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cheniere and Willamette is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy Partners and Willamette Valley Vineyards in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willamette Valley 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 Willamette Valley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willamette Valley has no effect on the direction of Cheniere Energy i.e., Cheniere Energy and Willamette Valley go up and down completely randomly.
Pair Corralation between Cheniere Energy and Willamette Valley
Considering the 90-day investment horizon Cheniere Energy Partners is expected to generate 0.61 times more return on investment than Willamette Valley. However, Cheniere Energy Partners is 1.64 times less risky than Willamette Valley. It trades about 0.13 of its potential returns per unit of risk. Willamette Valley Vineyards is currently generating about -0.05 per unit of risk. If you would invest 4,620 in Cheniere Energy Partners on August 30, 2024 and sell it today you would earn a total of 1,047 from holding Cheniere Energy Partners or generate 22.66% 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. Willamette Valley Vineyards
Performance |
| Timeline |
| Cheniere Energy Partners |
| Willamette Valley |
Cheniere Energy and Willamette Valley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheniere Energy and Willamette Valley
The main advantage of trading using opposite Cheniere Energy and Willamette Valley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheniere Energy position performs unexpectedly, Willamette Valley 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 Willamette Valley will offset losses from the drop in Willamette Valley's long position.| Cheniere Energy vs. Plains All American | Cheniere Energy vs. Genesis Energy LP | Cheniere Energy vs. Hess Midstream Partners | Cheniere Energy vs. Kinder Morgan |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |