Correlation Between Global Partners and Imperial Petroleum
Can any of the company-specific risk be diversified away by investing in both Global 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 Global 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 Global Partners LP and Imperial Petroleum Preferred, you can compare the effects of market volatilities on Global 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 Global Partners with a short position of Imperial Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Partners and Imperial Petroleum.
Diversification Opportunities for Global Partners and Imperial Petroleum
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Imperial is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Global Partners LP and Imperial Petroleum Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Petroleum 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 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 Global Partners i.e., Global Partners and Imperial Petroleum go up and down completely randomly.
Pair Corralation between Global Partners and Imperial Petroleum
Considering the 90-day investment horizon Global Partners LP is expected to generate 1.71 times more return on investment than Imperial Petroleum. However, Global Partners is 1.71 times more volatile than Imperial Petroleum Preferred. It trades about 0.07 of its potential returns per unit of risk. Imperial Petroleum Preferred is currently generating about 0.08 per unit of risk. If you would invest 2,557 in Global Partners LP on August 24, 2024 and sell it today you would earn a total of 2,628 from holding Global Partners LP or generate 102.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Partners LP vs. Imperial Petroleum Preferred
Performance |
| Timeline |
| Global Partners LP |
| Imperial Petroleum |
Global Partners and Imperial Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Partners and Imperial Petroleum
The main advantage of trading using opposite Global Partners and Imperial Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global 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.| Global Partners vs. Plains All American | Global Partners vs. Genesis Energy LP | Global Partners vs. Western Midstream Partners | Global Partners vs. Hess Midstream Partners |
| Imperial Petroleum vs. Imperial Petroleum | Imperial Petroleum vs. Dynagas LNG Partners | Imperial Petroleum vs. GasLog Partners LP | Imperial Petroleum vs. GasLog 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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