Correlation Between Excelerate Energy and Natural Resource
Can any of the company-specific risk be diversified away by investing in both Excelerate Energy and Natural Resource 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 Natural Resource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelerate Energy and Natural Resource Partners, you can compare the effects of market volatilities on Excelerate Energy and Natural Resource 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 Natural Resource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelerate Energy and Natural Resource.
Diversification Opportunities for Excelerate Energy and Natural Resource
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Excelerate and Natural is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Excelerate Energy and Natural Resource Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Resource Partners 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 Natural Resource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Resource Partners has no effect on the direction of Excelerate Energy i.e., Excelerate Energy and Natural Resource go up and down completely randomly.
Pair Corralation between Excelerate Energy and Natural Resource
Allowing for the 90-day total investment horizon Excelerate Energy is expected to generate 1.86 times more return on investment than Natural Resource. However, Excelerate Energy is 1.86 times more volatile than Natural Resource Partners. It trades about 0.04 of its potential returns per unit of risk. Natural Resource Partners is currently generating about -0.08 per unit of risk. If you would invest 2,948 in Excelerate Energy on November 9, 2024 and sell it today you would earn a total of 44.00 from holding Excelerate Energy or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Excelerate Energy vs. Natural Resource Partners
Performance |
| Timeline |
| Excelerate Energy |
| Natural Resource Partners |
Excelerate Energy and Natural Resource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excelerate Energy and Natural Resource
The main advantage of trading using opposite Excelerate Energy and Natural Resource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelerate Energy position performs unexpectedly, Natural Resource 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 Natural Resource will offset losses from the drop in Natural Resource's 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 |
| Natural Resource vs. Hallador Energy | Natural Resource vs. Adaro Energy Tbk | Natural Resource vs. Alliance Resource Partners | Natural Resource vs. Peabody Energy Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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