Correlation Between Excelerate Energy and Scorpio Tankers
Can any of the company-specific risk be diversified away by investing in both Excelerate Energy and Scorpio Tankers 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 Scorpio Tankers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelerate Energy and Scorpio Tankers, you can compare the effects of market volatilities on Excelerate Energy and Scorpio Tankers 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 Scorpio Tankers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelerate Energy and Scorpio Tankers.
Diversification Opportunities for Excelerate Energy and Scorpio Tankers
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Excelerate and Scorpio is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Excelerate Energy and Scorpio Tankers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scorpio Tankers 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 Scorpio Tankers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scorpio Tankers has no effect on the direction of Excelerate Energy i.e., Excelerate Energy and Scorpio Tankers go up and down completely randomly.
Pair Corralation between Excelerate Energy and Scorpio Tankers
Allowing for the 90-day total investment horizon Excelerate Energy is expected to generate 2.35 times more return on investment than Scorpio Tankers. However, Excelerate Energy is 2.35 times more volatile than Scorpio Tankers. It trades about 0.37 of its potential returns per unit of risk. Scorpio Tankers is currently generating about -0.4 per unit of risk. If you would invest 2,323 in Excelerate Energy on August 27, 2024 and sell it today you would earn a total of 734.00 from holding Excelerate Energy or generate 31.6% 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. Scorpio Tankers
Performance |
| Timeline |
| Excelerate Energy |
| Scorpio Tankers |
Excelerate Energy and Scorpio Tankers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excelerate Energy and Scorpio Tankers
The main advantage of trading using opposite Excelerate Energy and Scorpio Tankers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelerate Energy position performs unexpectedly, Scorpio Tankers 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 Scorpio Tankers will offset losses from the drop in Scorpio Tankers' 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 |
| Scorpio Tankers vs. Teekay Tankers | Scorpio Tankers vs. Navigator Holdings | Scorpio Tankers vs. DHT Holdings | Scorpio Tankers vs. Frontline |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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