Correlation Between Dynagas LNG and Brooge Holdings
Can any of the company-specific risk be diversified away by investing in both Dynagas LNG and Brooge Holdings 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 Dynagas LNG and Brooge Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dynagas LNG Partners and Brooge Holdings, you can compare the effects of market volatilities on Dynagas LNG and Brooge Holdings 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 Dynagas LNG with a short position of Brooge Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynagas LNG and Brooge Holdings.
Diversification Opportunities for Dynagas LNG and Brooge Holdings
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dynagas and Brooge is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Dynagas LNG Partners and Brooge Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brooge Holdings and Dynagas LNG 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 Dynagas LNG Partners are associated (or correlated) with Brooge Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brooge Holdings has no effect on the direction of Dynagas LNG i.e., Dynagas LNG and Brooge Holdings go up and down completely randomly.
Pair Corralation between Dynagas LNG and Brooge Holdings
Assuming the 90 days trading horizon Dynagas LNG is expected to generate 14.83 times less return on investment than Brooge Holdings. But when comparing it to its historical volatility, Dynagas LNG Partners is 14.28 times less risky than Brooge Holdings. It trades about 0.06 of its potential returns per unit of risk. Brooge Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 101.00 in Brooge Holdings on August 23, 2024 and sell it today you would earn a total of 33.00 from holding Brooge Holdings or generate 32.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dynagas LNG Partners vs. Brooge Holdings
Performance |
| Timeline |
| Dynagas LNG Partners |
| Brooge Holdings |
Dynagas LNG and Brooge Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dynagas LNG and Brooge Holdings
The main advantage of trading using opposite Dynagas LNG and Brooge Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dynagas LNG position performs unexpectedly, Brooge Holdings 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 Brooge Holdings will offset losses from the drop in Brooge Holdings' long position.| Dynagas LNG vs. GasLog Partners LP | Dynagas LNG vs. Dynagas LNG Partners | Dynagas LNG vs. GasLog Partners LP | Dynagas LNG vs. Seapeak LLC |
| Brooge Holdings vs. MPLX LP | Brooge Holdings vs. Western Midstream Partners | Brooge Holdings vs. Plains All American | Brooge Holdings vs. Antero 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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