Correlation Between Global Partners and GasLog Partners
Can any of the company-specific risk be diversified away by investing in both Global Partners and GasLog Partners 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 Global Partners and GasLog Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Partners LP and GasLog Partners LP, you can compare the effects of market volatilities on Global Partners and GasLog Partners 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 Global Partners with a short position of GasLog Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Partners and GasLog Partners.
Diversification Opportunities for Global Partners and GasLog Partners
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and GasLog is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Global Partners LP and GasLog Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GasLog Partners LP and Global 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 Global Partners LP are associated (or correlated) with GasLog Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GasLog Partners LP has no effect on the direction of Global Partners i.e., Global Partners and GasLog Partners go up and down completely randomly.
Pair Corralation between Global Partners and GasLog Partners
Assuming the 90 days trading horizon Global Partners is expected to generate 1.43 times less return on investment than GasLog Partners. In addition to that, Global Partners is 1.01 times more volatile than GasLog Partners LP. It trades about 0.17 of its total potential returns per unit of risk. GasLog Partners LP is currently generating about 0.25 per unit of volatility. If you would invest 2,545 in GasLog Partners LP on September 2, 2024 and sell it today you would earn a total of 34.00 from holding GasLog Partners LP or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Partners LP vs. GasLog Partners LP
Performance |
| Timeline |
| Global Partners LP |
| GasLog Partners LP |
Global Partners and GasLog Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Partners and GasLog Partners
The main advantage of trading using opposite Global Partners and GasLog Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Partners position performs unexpectedly, GasLog Partners 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 GasLog Partners will offset losses from the drop in GasLog Partners' long position.| Global Partners vs. GasLog Partners LP | Global Partners vs. GasLog Partners LP | Global Partners vs. Aquagold International | Global Partners vs. Thrivent High Yield |
| GasLog Partners vs. Dynagas LNG Partners | GasLog Partners vs. NGL Energy Partners | GasLog Partners vs. Seapeak LLC | GasLog Partners vs. Global Partners LP |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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