Correlation Between GasLog Partners and Martin Midstream
Can any of the company-specific risk be diversified away by investing in both GasLog Partners 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 GasLog Partners and Martin Midstream 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 Martin Midstream Partners, you can compare the effects of market volatilities on GasLog Partners 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 GasLog Partners with a short position of Martin Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of GasLog Partners and Martin Midstream.
Diversification Opportunities for GasLog Partners and Martin Midstream
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GasLog and Martin is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding GasLog Partners 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 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 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 GasLog Partners i.e., GasLog Partners and Martin Midstream go up and down completely randomly.
Pair Corralation between GasLog Partners and Martin Midstream
Assuming the 90 days trading horizon GasLog Partners is expected to generate 4.49 times less return on investment than Martin Midstream. But when comparing it to its historical volatility, GasLog Partners LP is 5.96 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 0.1 of returns per unit of risk over similar time horizon. If you would invest 314.00 in Martin Midstream Partners on August 24, 2024 and sell it today you would earn a total of 85.00 from holding Martin Midstream Partners or generate 27.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GasLog Partners LP vs. Martin Midstream Partners
Performance |
| Timeline |
| GasLog Partners LP |
| Martin Midstream Partners |
GasLog Partners and Martin Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GasLog Partners and Martin Midstream
The main advantage of trading using opposite GasLog Partners and Martin Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GasLog Partners 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.| GasLog Partners vs. GasLog Partners LP | GasLog Partners vs. Seapeak LLC | GasLog Partners vs. Dynagas LNG Partners | GasLog Partners vs. GasLog Partners LP |
| Martin Midstream vs. Brooge Holdings | Martin Midstream vs. Plains All American | Martin Midstream vs. Western Midstream Partners | Martin Midstream vs. Hess Midstream 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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