Correlation Between Cheniere Energy and Elis SA
Can any of the company-specific risk be diversified away by investing in both Cheniere Energy and Elis SA 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 Elis SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheniere Energy and Elis SA, you can compare the effects of market volatilities on Cheniere Energy and Elis SA 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 Elis SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheniere Energy and Elis SA.
Diversification Opportunities for Cheniere Energy and Elis SA
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cheniere and Elis is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy and Elis SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elis SA 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 Elis SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elis SA has no effect on the direction of Cheniere Energy i.e., Cheniere Energy and Elis SA go up and down completely randomly.
Pair Corralation between Cheniere Energy and Elis SA
If you would invest 20,938 in Cheniere Energy on October 23, 2024 and sell it today you would earn a total of 4,338 from holding Cheniere Energy or generate 20.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Cheniere Energy vs. Elis SA
Performance |
| Timeline |
| Cheniere Energy |
| Elis SA |
Cheniere Energy and Elis SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cheniere Energy and Elis SA
The main advantage of trading using opposite Cheniere Energy and Elis SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheniere Energy position performs unexpectedly, Elis SA 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 Elis SA will offset losses from the drop in Elis SA's long position.| Cheniere Energy vs. Western Midstream Partners | Cheniere Energy vs. Williams Companies | Cheniere Energy vs. Enterprise Products Partners | Cheniere Energy vs. ONEOK Inc |
| Elis SA vs. Maximus | Elis SA vs. Network 1 Technologies | Elis SA vs. First Advantage Corp | Elis SA vs. BrightView Holdings |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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