Correlation Between GasLog Partners and Imperial Petroleum
Can any of the company-specific risk be diversified away by investing in both GasLog Partners and Imperial Petroleum 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 GasLog Partners and Imperial Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GasLog Partners LP and Imperial Petroleum, you can compare the effects of market volatilities on GasLog Partners and Imperial Petroleum 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 GasLog Partners with a short position of Imperial Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of GasLog Partners and Imperial Petroleum.
Diversification Opportunities for GasLog Partners and Imperial Petroleum
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GasLog and Imperial is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding GasLog Partners LP and Imperial Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Petroleum and GasLog Partners 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 GasLog Partners LP are associated (or correlated) with Imperial Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Petroleum has no effect on the direction of GasLog Partners i.e., GasLog Partners and Imperial Petroleum go up and down completely randomly.
Pair Corralation between GasLog Partners and Imperial Petroleum
Assuming the 90 days trading horizon GasLog Partners is expected to generate 2.23 times less return on investment than Imperial Petroleum. But when comparing it to its historical volatility, GasLog Partners LP is 5.02 times less risky than Imperial Petroleum. It trades about 0.09 of its potential returns per unit of risk. Imperial Petroleum is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 260.00 in Imperial Petroleum on August 27, 2024 and sell it today you would earn a total of 77.00 from holding Imperial Petroleum or generate 29.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GasLog Partners LP vs. Imperial Petroleum
Performance |
| Timeline |
| GasLog Partners LP |
| Imperial Petroleum |
GasLog Partners and Imperial Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GasLog Partners and Imperial Petroleum
The main advantage of trading using opposite GasLog Partners and Imperial Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GasLog Partners position performs unexpectedly, Imperial Petroleum 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 Imperial Petroleum will offset losses from the drop in Imperial Petroleum's long position.| GasLog Partners vs. GasLog Partners LP | GasLog Partners vs. GasLog Partners LP | GasLog Partners vs. Dynagas LNG Partners | GasLog Partners vs. Dynagas LNG Partners |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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