Correlation Between Green Plains and Marine Petroleum
Can any of the company-specific risk be diversified away by investing in both Green Plains and Marine 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 Green Plains and Marine Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Plains Partners and Marine Petroleum Trust, you can compare the effects of market volatilities on Green Plains and Marine 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 Green Plains with a short position of Marine Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Plains and Marine Petroleum.
Diversification Opportunities for Green Plains and Marine Petroleum
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Green and Marine is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Green Plains Partners and Marine Petroleum Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Petroleum Trust and Green Plains 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 Green Plains Partners are associated (or correlated) with Marine Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Petroleum Trust has no effect on the direction of Green Plains i.e., Green Plains and Marine Petroleum go up and down completely randomly.
Pair Corralation between Green Plains and Marine Petroleum
Considering the 90-day investment horizon Green Plains Partners is expected to generate 0.43 times more return on investment than Marine Petroleum. However, Green Plains Partners is 2.34 times less risky than Marine Petroleum. It trades about 0.12 of its potential returns per unit of risk. Marine Petroleum Trust is currently generating about -0.02 per unit of risk. If you would invest 1,120 in Green Plains Partners on September 2, 2024 and sell it today you would earn a total of 296.00 from holding Green Plains Partners or generate 26.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.05% |
| Values | Daily Returns |
Green Plains Partners vs. Marine Petroleum Trust
Performance |
| Timeline |
| Green Plains Partners |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Marine Petroleum Trust |
Green Plains and Marine Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Plains and Marine Petroleum
The main advantage of trading using opposite Green Plains and Marine Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Plains position performs unexpectedly, Marine 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 Marine Petroleum will offset losses from the drop in Marine Petroleum's long position.| Green Plains vs. Plains All American | Green Plains vs. Genesis Energy LP | Green Plains vs. Western Midstream Partners | Green Plains vs. Hess Midstream Partners |
| Marine Petroleum vs. GasLog Partners LP | Marine Petroleum vs. GasLog Partners LP | Marine Petroleum vs. Brooge Holdings | Marine Petroleum vs. Dynagas LNG 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 CEOs Directory module to screen CEOs from public companies around the world.
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