Correlation Between Genesis Energy and Martin Midstream
Can any of the company-specific risk be diversified away by investing in both Genesis Energy and Martin Midstream 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 Martin Midstream 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 Martin Midstream Partners, you can compare the effects of market volatilities on Genesis Energy and Martin Midstream 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 Martin Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genesis Energy and Martin Midstream.
Diversification Opportunities for Genesis Energy and Martin Midstream
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genesis and Martin is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Genesis Energy LP and Martin Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Martin Midstream 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 Martin Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Martin Midstream Partners has no effect on the direction of Genesis Energy i.e., Genesis Energy and Martin Midstream go up and down completely randomly.
Pair Corralation between Genesis Energy and Martin Midstream
Considering the 90-day investment horizon Genesis Energy is expected to generate 1.88 times less return on investment than Martin Midstream. But when comparing it to its historical volatility, Genesis Energy LP is 1.56 times less risky than Martin Midstream. It trades about 0.13 of its potential returns per unit of risk. Martin Midstream Partners is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 342.00 in Martin Midstream Partners on November 2, 2024 and sell it today you would earn a total of 28.00 from holding Martin Midstream Partners or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genesis Energy LP vs. Martin Midstream Partners
Performance |
| Timeline |
| Genesis Energy LP |
| Martin Midstream Partners |
Genesis Energy and Martin Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genesis Energy and Martin Midstream
The main advantage of trading using opposite Genesis Energy and Martin Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genesis Energy position performs unexpectedly, Martin Midstream 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 Martin Midstream will offset losses from the drop in Martin Midstream's long position.| Genesis Energy vs. Brooge Holdings | Genesis Energy vs. Plains All American | Genesis Energy vs. Western Midstream Partners | Genesis Energy vs. Hess Midstream Partners |
| Martin Midstream vs. Western Midstream Partners | Martin Midstream vs. EnLink Midstream LLC | Martin Midstream vs. Kinetik Holdings | Martin Midstream vs. NGL Energy 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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