Correlation Between Genesis Energy and Cheniere Energy

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Genesis Energy and Cheniere 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 Genesis Energy and Cheniere Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genesis Energy LP and Cheniere Energy Partners, you can compare the effects of market volatilities on Genesis Energy and Cheniere 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 Genesis Energy with a short position of Cheniere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genesis Energy and Cheniere Energy.

Diversification Opportunities for Genesis Energy and Cheniere Energy

-0.6
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Genesis and Cheniere is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Genesis Energy LP and Cheniere Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheniere Energy Partners and Genesis Energy 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 Genesis Energy LP are associated (or correlated) with Cheniere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheniere Energy Partners has no effect on the direction of Genesis Energy i.e., Genesis Energy and Cheniere Energy go up and down completely randomly.

Pair Corralation between Genesis Energy and Cheniere Energy

Considering the 90-day investment horizon Genesis Energy LP is expected to under-perform the Cheniere Energy. In addition to that, Genesis Energy is 2.46 times more volatile than Cheniere Energy Partners. It trades about -0.1 of its total potential returns per unit of risk. Cheniere Energy Partners is currently generating about 0.49 per unit of volatility. If you would invest  4,788  in Cheniere Energy Partners on August 28, 2024 and sell it today you would earn a total of  702.00  from holding Cheniere Energy Partners or generate 14.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Genesis Energy LP  vs.  Cheniere Energy Partners

 Performance 
       Timeline  
Genesis Energy LP 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Genesis Energy LP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.
Cheniere Energy Partners 

Risk-Adjusted Performance

16 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Cheniere Energy Partners are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Cheniere Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Genesis Energy and Cheniere Energy Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Genesis Energy and Cheniere Energy

The main advantage of trading using opposite Genesis Energy and Cheniere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genesis Energy position performs unexpectedly, Cheniere 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 Cheniere Energy will offset losses from the drop in Cheniere Energy's long position.
The idea behind Genesis Energy LP and Cheniere Energy Partners pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

Other Complementary Tools

Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format
Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
Commodity Directory
Find actively traded commodities issued by global exchanges