Correlation Between Loews Corp and Energy Transfer
Can any of the company-specific risk be diversified away by investing in both Loews Corp and Energy Transfer 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 Loews Corp and Energy Transfer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loews Corp and Energy Transfer LP, you can compare the effects of market volatilities on Loews Corp and Energy Transfer 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 Loews Corp with a short position of Energy Transfer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loews Corp and Energy Transfer.
Diversification Opportunities for Loews Corp and Energy Transfer
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Loews and Energy is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and Energy Transfer LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Transfer LP and Loews Corp 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 Loews Corp are associated (or correlated) with Energy Transfer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Transfer LP has no effect on the direction of Loews Corp i.e., Loews Corp and Energy Transfer go up and down completely randomly.
Pair Corralation between Loews Corp and Energy Transfer
Taking into account the 90-day investment horizon Loews Corp is expected to generate 2.14 times more return on investment than Energy Transfer. However, Loews Corp is 2.14 times more volatile than Energy Transfer LP. It trades about 0.06 of its potential returns per unit of risk. Energy Transfer LP is currently generating about 0.06 per unit of risk. If you would invest 8,416 in Loews Corp on November 3, 2024 and sell it today you would earn a total of 129.00 from holding Loews Corp or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loews Corp vs. Energy Transfer LP
Performance |
| Timeline |
| Loews Corp |
| Energy Transfer LP |
Loews Corp and Energy Transfer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loews Corp and Energy Transfer
The main advantage of trading using opposite Loews Corp and Energy Transfer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp position performs unexpectedly, Energy Transfer 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 Energy Transfer will offset losses from the drop in Energy Transfer's long position.| Loews Corp vs. Horace Mann Educators | Loews Corp vs. Global Indemnity PLC | Loews Corp vs. Selective Insurance Group | Loews Corp vs. Kemper |
| Energy Transfer vs. Capri Holdings | Energy Transfer vs. Canada Goose Holdings | Energy Transfer vs. Rocky Brands | Energy Transfer vs. Skechers USA |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |