Correlation Between Excelerate Energy and International Seaways
Can any of the company-specific risk be diversified away by investing in both Excelerate Energy and International Seaways 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 International Seaways into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelerate Energy and International Seaways, you can compare the effects of market volatilities on Excelerate Energy and International Seaways 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 International Seaways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelerate Energy and International Seaways.
Diversification Opportunities for Excelerate Energy and International Seaways
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Excelerate and International is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Excelerate Energy and International Seaways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Seaways 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 International Seaways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Seaways has no effect on the direction of Excelerate Energy i.e., Excelerate Energy and International Seaways go up and down completely randomly.
Pair Corralation between Excelerate Energy and International Seaways
Allowing for the 90-day total investment horizon Excelerate Energy is expected to generate 2.57 times more return on investment than International Seaways. However, Excelerate Energy is 2.57 times more volatile than International Seaways. It trades about 0.34 of its potential returns per unit of risk. International Seaways is currently generating about -0.29 per unit of risk. If you would invest 2,323 in Excelerate Energy on August 28, 2024 and sell it today you would earn a total of 685.00 from holding Excelerate Energy or generate 29.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Excelerate Energy vs. International Seaways
Performance |
| Timeline |
| Excelerate Energy |
| International Seaways |
Excelerate Energy and International Seaways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excelerate Energy and International Seaways
The main advantage of trading using opposite Excelerate Energy and International Seaways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelerate Energy position performs unexpectedly, International Seaways 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 International Seaways will offset losses from the drop in International Seaways' long position.| Excelerate Energy vs. Atlantica Sustainable Infrastructure | Excelerate Energy vs. Clearway Energy | Excelerate Energy vs. Brookfield Renewable Corp | Excelerate Energy vs. Nextera Energy Partners |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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