Correlation Between Cheniere Energy and Scepter Holdings
Can any of the company-specific risk be diversified away by investing in both Cheniere Energy and Scepter Holdings 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 Cheniere Energy and Scepter Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheniere Energy and Scepter Holdings, you can compare the effects of market volatilities on Cheniere Energy and Scepter Holdings 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 Cheniere Energy with a short position of Scepter Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheniere Energy and Scepter Holdings.
Diversification Opportunities for Cheniere Energy and Scepter Holdings
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cheniere and Scepter is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy and Scepter Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scepter Holdings and Cheniere Energy 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 Cheniere Energy are associated (or correlated) with Scepter Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scepter Holdings has no effect on the direction of Cheniere Energy i.e., Cheniere Energy and Scepter Holdings go up and down completely randomly.
Pair Corralation between Cheniere Energy and Scepter Holdings
Considering the 90-day investment horizon Cheniere Energy is expected to generate 0.13 times more return on investment than Scepter Holdings. However, Cheniere Energy is 7.74 times less risky than Scepter Holdings. It trades about 0.59 of its potential returns per unit of risk. Scepter Holdings is currently generating about -0.05 per unit of risk. If you would invest 20,938 in Cheniere Energy on October 23, 2024 and sell it today you would earn a total of 4,025 from holding Cheniere Energy or generate 19.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Cheniere Energy vs. Scepter Holdings
Performance |
| Timeline |
| Cheniere Energy |
| Scepter Holdings |
Cheniere Energy and Scepter Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheniere Energy and Scepter Holdings
The main advantage of trading using opposite Cheniere Energy and Scepter Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheniere Energy position performs unexpectedly, Scepter Holdings 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 Scepter Holdings will offset losses from the drop in Scepter Holdings' long position.| Cheniere Energy vs. Western Midstream Partners | Cheniere Energy vs. Williams Companies | Cheniere Energy vs. Enterprise Products Partners | Cheniere Energy vs. ONEOK Inc |
| Scepter Holdings vs. The Planting Hope | Scepter Holdings vs. Else Nutrition Holdings | Scepter Holdings vs. Steakholder Foods | Scepter Holdings vs. Laird Superfood |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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