Correlation Between Global Partners and Dorian LPG
Can any of the company-specific risk be diversified away by investing in both Global Partners and Dorian LPG 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 Dorian LPG 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 Dorian LPG, you can compare the effects of market volatilities on Global Partners and Dorian LPG 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 Dorian LPG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Partners and Dorian LPG.
Diversification Opportunities for Global Partners and Dorian LPG
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Global and Dorian is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Global Partners LP and Dorian LPG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dorian LPG 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 Dorian LPG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dorian LPG has no effect on the direction of Global Partners i.e., Global Partners and Dorian LPG go up and down completely randomly.
Pair Corralation between Global Partners and Dorian LPG
Considering the 90-day investment horizon Global Partners LP is expected to generate 0.96 times more return on investment than Dorian LPG. However, Global Partners LP is 1.04 times less risky than Dorian LPG. It trades about 0.05 of its potential returns per unit of risk. Dorian LPG is currently generating about -0.05 per unit of risk. If you would invest 4,442 in Global Partners LP on August 27, 2024 and sell it today you would earn a total of 859.00 from holding Global Partners LP or generate 19.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Partners LP vs. Dorian LPG
Performance |
| Timeline |
| Global Partners LP |
| Dorian LPG |
Global Partners and Dorian LPG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Partners and Dorian LPG
The main advantage of trading using opposite Global Partners and Dorian LPG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Partners position performs unexpectedly, Dorian LPG 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 Dorian LPG will offset losses from the drop in Dorian LPG'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 |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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