Correlation Between EQT and FLEX LNG
Can any of the company-specific risk be diversified away by investing in both EQT and FLEX LNG 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 EQT and FLEX LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EQT Corporation and FLEX LNG, you can compare the effects of market volatilities on EQT and FLEX LNG 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 EQT with a short position of FLEX LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of EQT and FLEX LNG.
Diversification Opportunities for EQT and FLEX LNG
Good diversification
The 3 months correlation between EQT and FLEX is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding EQT Corp. and FLEX LNG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLEX LNG and EQT 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 EQT Corporation are associated (or correlated) with FLEX LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLEX LNG has no effect on the direction of EQT i.e., EQT and FLEX LNG go up and down completely randomly.
Pair Corralation between EQT and FLEX LNG
Considering the 90-day investment horizon EQT Corporation is expected to generate 1.42 times more return on investment than FLEX LNG. However, EQT is 1.42 times more volatile than FLEX LNG. It trades about 0.04 of its potential returns per unit of risk. FLEX LNG is currently generating about 0.0 per unit of risk. If you would invest 3,952 in EQT Corporation on August 27, 2024 and sell it today you would earn a total of 640.00 from holding EQT Corporation or generate 16.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EQT Corp. vs. FLEX LNG
Performance |
| Timeline |
| EQT Corporation |
| FLEX LNG |
EQT and FLEX LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EQT and FLEX LNG
The main advantage of trading using opposite EQT and FLEX LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EQT position performs unexpectedly, FLEX LNG 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 FLEX LNG will offset losses from the drop in FLEX LNG's long position.| EQT vs. Antero Resources Corp | EQT vs. Matador Resources | EQT vs. Devon Energy | EQT vs. Diamondback Energy |
| FLEX LNG vs. Ucommune International | FLEX LNG vs. Lion Financial Group | FLEX LNG vs. HUMANA INC | FLEX LNG vs. Aquagold International |
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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