Correlation Between Energy Transfer and SGS SA
Can any of the company-specific risk be diversified away by investing in both Energy Transfer and SGS SA 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 SGS SA 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 SGS SA, you can compare the effects of market volatilities on Energy Transfer and SGS SA 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 SGS SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Transfer and SGS SA.
Diversification Opportunities for Energy Transfer and SGS SA
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Energy and SGS is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Energy Transfer LP and SGS SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGS SA 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 SGS SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGS SA has no effect on the direction of Energy Transfer i.e., Energy Transfer and SGS SA go up and down completely randomly.
Pair Corralation between Energy Transfer and SGS SA
Allowing for the 90-day total investment horizon Energy Transfer LP is expected to generate 0.81 times more return on investment than SGS SA. However, Energy Transfer LP is 1.24 times less risky than SGS SA. It trades about 0.63 of its potential returns per unit of risk. SGS SA is currently generating about -0.28 per unit of risk. 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 Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Energy Transfer LP vs. SGS SA
Performance |
Timeline |
Energy Transfer LP |
SGS SA |
Energy Transfer and SGS SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Energy Transfer and SGS SA
The main advantage of trading using opposite Energy Transfer and SGS SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Transfer position performs unexpectedly, SGS SA 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 SGS SA will offset losses from the drop in SGS SA's long position.Energy Transfer vs. Kinder Morgan | Energy Transfer vs. MPLX LP | Energy Transfer vs. Enbridge | Energy Transfer vs. Enterprise Products Partners |
SGS SA vs. Sack Lunch Productions | SGS SA vs. Potash America | SGS SA vs. Dalrada Financial Corp | SGS SA vs. TransUnion |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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