Correlation Between FLEX LNG and EQT
Can any of the company-specific risk be diversified away by investing in both FLEX LNG and EQT 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 FLEX LNG and EQT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FLEX LNG and EQT Corporation, you can compare the effects of market volatilities on FLEX LNG and EQT 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 FLEX LNG with a short position of EQT. Check out your portfolio center. Please also check ongoing floating volatility patterns of FLEX LNG and EQT.
Diversification Opportunities for FLEX LNG and EQT
Good diversification
The 3 months correlation between FLEX and EQT is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding FLEX LNG and EQT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQT Corporation and FLEX LNG 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 FLEX LNG are associated (or correlated) with EQT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQT Corporation has no effect on the direction of FLEX LNG i.e., FLEX LNG and EQT go up and down completely randomly.
Pair Corralation between FLEX LNG and EQT
Given the investment horizon of 90 days FLEX LNG is expected to generate 62.92 times less return on investment than EQT. But when comparing it to its historical volatility, FLEX LNG is 1.42 times less risky than EQT. It trades about 0.0 of its potential returns per unit of risk. EQT Corporation is currently generating about 0.04 of returns per unit of risk over similar time horizon. 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 |
FLEX LNG vs. EQT Corp.
Performance |
| Timeline |
| FLEX LNG |
| EQT Corporation |
FLEX LNG and EQT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FLEX LNG and EQT
The main advantage of trading using opposite FLEX LNG and EQT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FLEX LNG position performs unexpectedly, EQT 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 EQT will offset losses from the drop in EQT's long position.| FLEX LNG vs. Ucommune International | FLEX LNG vs. Lion Financial Group | FLEX LNG vs. HUMANA INC | FLEX LNG vs. Aquagold International |
| EQT vs. Antero Resources Corp | EQT vs. Matador Resources | EQT vs. Devon Energy | EQT vs. Diamondback Energy |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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