Correlation Between Excelerate Energy and Vertex Energy
Can any of the company-specific risk be diversified away by investing in both Excelerate Energy and Vertex Energy 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 Vertex Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Excelerate Energy and Vertex Energy, you can compare the effects of market volatilities on Excelerate Energy and Vertex Energy 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 Vertex Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Excelerate Energy and Vertex Energy.
Diversification Opportunities for Excelerate Energy and Vertex Energy
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Excelerate and Vertex is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Excelerate Energy and Vertex Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertex Energy 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 Vertex Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vertex Energy has no effect on the direction of Excelerate Energy i.e., Excelerate Energy and Vertex Energy go up and down completely randomly.
Pair Corralation between Excelerate Energy and Vertex Energy
Allowing for the 90-day total investment horizon Excelerate Energy is expected to generate 1.21 times less return on investment than Vertex Energy. But when comparing it to its historical volatility, Excelerate Energy is 2.76 times less risky than Vertex Energy. It trades about 0.33 of its potential returns per unit of risk. Vertex Energy is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 5.20 in Vertex Energy on August 28, 2024 and sell it today you would earn a total of 1.30 from holding Vertex Energy or generate 25.0% 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. Vertex Energy
Performance |
| Timeline |
| Excelerate Energy |
| Vertex Energy |
Excelerate Energy and Vertex Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Excelerate Energy and Vertex Energy
The main advantage of trading using opposite Excelerate Energy and Vertex Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Excelerate Energy position performs unexpectedly, Vertex Energy 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 Vertex Energy will offset losses from the drop in Vertex Energy's 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 |
| Vertex Energy vs. Clean Energy Fuels | Vertex Energy vs. Icahn Enterprises LP | Vertex Energy vs. PBF Energy | Vertex Energy vs. Delek Logistics 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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