Correlation Between Energy Transfer and First Internet
Can any of the company-specific risk be diversified away by investing in both Energy Transfer and First Internet 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 Energy Transfer and First Internet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Transfer LP and First Internet Bancorp, you can compare the effects of market volatilities on Energy Transfer and First Internet 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 Energy Transfer with a short position of First Internet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Transfer and First Internet.
Diversification Opportunities for Energy Transfer and First Internet
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Energy and First is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Energy Transfer LP and First Internet Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Internet Bancorp and Energy Transfer 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 Energy Transfer LP are associated (or correlated) with First Internet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Internet Bancorp has no effect on the direction of Energy Transfer i.e., Energy Transfer and First Internet go up and down completely randomly.
Pair Corralation between Energy Transfer and First Internet
Allowing for the 90-day total investment horizon Energy Transfer LP is expected to generate 3.31 times more return on investment than First Internet. However, Energy Transfer is 3.31 times more volatile than First Internet Bancorp. It trades about 0.78 of its potential returns per unit of risk. First Internet Bancorp is currently generating about 0.28 per unit of risk. If you would invest 1,617 in Energy Transfer LP on September 1, 2024 and sell it today you would earn a total of 369.00 from holding Energy Transfer LP or generate 22.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Energy Transfer LP vs. First Internet Bancorp
Performance |
| Timeline |
| Energy Transfer LP |
| First Internet Bancorp |
Energy Transfer and First Internet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Transfer and First Internet
The main advantage of trading using opposite Energy Transfer and First Internet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Transfer position performs unexpectedly, First Internet 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 First Internet will offset losses from the drop in First Internet's long position.| Energy Transfer vs. Kinder Morgan | Energy Transfer vs. MPLX LP | Energy Transfer vs. Enbridge | Energy Transfer vs. Enterprise Products 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |