Correlation Between Excelerate Energy and Global Partners
Can any of the company-specific risk be diversified away by investing in both Excelerate Energy and Global Partners 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 Excelerate Energy and Global Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelerate Energy and Global Partners LP, you can compare the effects of market volatilities on Excelerate Energy and Global Partners 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 Excelerate Energy with a short position of Global Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelerate Energy and Global Partners.
Diversification Opportunities for Excelerate Energy and Global Partners
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Excelerate and Global is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Excelerate Energy and Global Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partners LP and Excelerate 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 Excelerate Energy are associated (or correlated) with Global Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partners LP has no effect on the direction of Excelerate Energy i.e., Excelerate Energy and Global Partners go up and down completely randomly.
Pair Corralation between Excelerate Energy and Global Partners
Allowing for the 90-day total investment horizon Excelerate Energy is expected to generate 1.1 times more return on investment than Global Partners. However, Excelerate Energy is 1.1 times more volatile than Global Partners LP. It trades about 0.13 of its potential returns per unit of risk. Global Partners LP is currently generating about 0.05 per unit of risk. If you would invest 1,402 in Excelerate Energy on November 3, 2024 and sell it today you would earn a total of 1,585 from holding Excelerate Energy or generate 113.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Excelerate Energy vs. Global Partners LP
Performance |
| Timeline |
| Excelerate Energy |
| Global Partners LP |
Excelerate Energy and Global Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excelerate Energy and Global Partners
The main advantage of trading using opposite Excelerate Energy and Global Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelerate Energy position performs unexpectedly, Global Partners 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 Global Partners will offset losses from the drop in Global Partners' long position.| Excelerate Energy vs. Clearway Energy | Excelerate Energy vs. Brookfield Renewable Corp | Excelerate Energy vs. Nextera Energy Partners | Excelerate Energy vs. Brookfield Renewable Partners |
| Global Partners vs. Plains All American | Global Partners vs. Genesis Energy LP | Global Partners vs. Western Midstream Partners | Global Partners 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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