Correlation Between Energy Transfer and NuStar Energy
Can any of the company-specific risk be diversified away by investing in both Energy Transfer and NuStar 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 Energy Transfer and NuStar Energy 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 NuStar Energy LP, you can compare the effects of market volatilities on Energy Transfer and NuStar 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 Energy Transfer with a short position of NuStar Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Transfer and NuStar Energy.
Diversification Opportunities for Energy Transfer and NuStar Energy
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Energy and NuStar is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Energy Transfer LP and NuStar Energy LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuStar Energy LP 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 NuStar Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuStar Energy LP has no effect on the direction of Energy Transfer i.e., Energy Transfer and NuStar Energy go up and down completely randomly.
Pair Corralation between Energy Transfer and NuStar Energy
If you would invest 1,610 in Energy Transfer LP on August 27, 2024 and sell it today you would earn a total of 287.00 from holding Energy Transfer LP or generate 17.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Energy Transfer LP vs. NuStar Energy LP
Performance |
| Timeline |
| Energy Transfer LP |
| NuStar Energy LP |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Energy Transfer and NuStar Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Transfer and NuStar Energy
The main advantage of trading using opposite Energy Transfer and NuStar Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Transfer position performs unexpectedly, NuStar 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 NuStar Energy will offset losses from the drop in NuStar Energy's long position.| Energy Transfer vs. Kinder Morgan | Energy Transfer vs. MPLX LP | Energy Transfer vs. Enbridge | Energy Transfer vs. Enterprise Products Partners |
| NuStar Energy vs. MPLX LP | NuStar Energy vs. Western Midstream Partners | NuStar Energy vs. Plains All American | NuStar Energy vs. Genesis Energy LP |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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