Correlation Between EnLink Midstream and Imperial Petroleum
Can any of the company-specific risk be diversified away by investing in both EnLink Midstream and Imperial Petroleum 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 EnLink Midstream and Imperial Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EnLink Midstream LLC and Imperial Petroleum, you can compare the effects of market volatilities on EnLink Midstream and Imperial Petroleum 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 EnLink Midstream with a short position of Imperial Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of EnLink Midstream and Imperial Petroleum.
Diversification Opportunities for EnLink Midstream and Imperial Petroleum
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EnLink and Imperial is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding EnLink Midstream LLC and Imperial Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Petroleum and EnLink Midstream 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 EnLink Midstream LLC are associated (or correlated) with Imperial Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Petroleum has no effect on the direction of EnLink Midstream i.e., EnLink Midstream and Imperial Petroleum go up and down completely randomly.
Pair Corralation between EnLink Midstream and Imperial Petroleum
Given the investment horizon of 90 days EnLink Midstream LLC is expected to generate 1.17 times more return on investment than Imperial Petroleum. However, EnLink Midstream is 1.17 times more volatile than Imperial Petroleum. It trades about 0.3 of its potential returns per unit of risk. Imperial Petroleum is currently generating about -0.43 per unit of risk. If you would invest 1,464 in EnLink Midstream LLC on August 24, 2024 and sell it today you would earn a total of 103.00 from holding EnLink Midstream LLC or generate 7.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EnLink Midstream LLC vs. Imperial Petroleum
Performance |
| Timeline |
| EnLink Midstream LLC |
| Imperial Petroleum |
EnLink Midstream and Imperial Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EnLink Midstream and Imperial Petroleum
The main advantage of trading using opposite EnLink Midstream and Imperial Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EnLink Midstream position performs unexpectedly, Imperial Petroleum 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 Imperial Petroleum will offset losses from the drop in Imperial Petroleum's long position.| EnLink Midstream vs. Plains All American | EnLink Midstream vs. Hess Midstream Partners | EnLink Midstream vs. Western Midstream Partners | EnLink Midstream vs. Plains GP Holdings |
| Imperial Petroleum vs. CBL International Limited | Imperial Petroleum vs. Mirage Energy Corp | Imperial Petroleum vs. Marine Petroleum Trust | Imperial Petroleum vs. Teekay Tankers |
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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