Correlation Between Equitrans Midstream and Crestwood Equity
Can any of the company-specific risk be diversified away by investing in both Equitrans Midstream and Crestwood Equity 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 Equitrans Midstream and Crestwood Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equitrans Midstream Corp and Crestwood Equity Partners, you can compare the effects of market volatilities on Equitrans Midstream and Crestwood Equity 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 Equitrans Midstream with a short position of Crestwood Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equitrans Midstream and Crestwood Equity.
Diversification Opportunities for Equitrans Midstream and Crestwood Equity
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Equitrans and Crestwood is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Equitrans Midstream Corp and Crestwood Equity Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crestwood Equity Partners and Equitrans 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 Equitrans Midstream Corp are associated (or correlated) with Crestwood Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crestwood Equity Partners has no effect on the direction of Equitrans Midstream i.e., Equitrans Midstream and Crestwood Equity go up and down completely randomly.
Pair Corralation between Equitrans Midstream and Crestwood Equity
Given the investment horizon of 90 days Equitrans Midstream Corp is expected to generate 1.57 times more return on investment than Crestwood Equity. However, Equitrans Midstream is 1.57 times more volatile than Crestwood Equity Partners. It trades about 0.06 of its potential returns per unit of risk. Crestwood Equity Partners is currently generating about 0.03 per unit of risk. If you would invest 721.00 in Equitrans Midstream Corp on August 24, 2024 and sell it today you would earn a total of 521.00 from holding Equitrans Midstream Corp or generate 72.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.97% |
| Values | Daily Returns |
Equitrans Midstream Corp vs. Crestwood Equity Partners
Performance |
| Timeline |
| Equitrans Midstream Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Crestwood Equity Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Equitrans Midstream and Crestwood Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equitrans Midstream and Crestwood Equity
The main advantage of trading using opposite Equitrans Midstream and Crestwood Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equitrans Midstream position performs unexpectedly, Crestwood Equity 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 Crestwood Equity will offset losses from the drop in Crestwood Equity's long position.| Equitrans Midstream vs. MPLX LP | Equitrans Midstream vs. Plains All American | Equitrans Midstream vs. Hess Midstream Partners | Equitrans Midstream vs. Plains GP Holdings |
| Crestwood Equity vs. Western Midstream Partners | Crestwood Equity vs. DT Midstream | Crestwood Equity vs. MPLX LP | Crestwood Equity 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |