Correlation Between Marine Petroleum and AltaGas
Can any of the company-specific risk be diversified away by investing in both Marine Petroleum and AltaGas 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 Marine Petroleum and AltaGas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marine Petroleum Trust and AltaGas, you can compare the effects of market volatilities on Marine Petroleum and AltaGas 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 Marine Petroleum with a short position of AltaGas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Petroleum and AltaGas.
Diversification Opportunities for Marine Petroleum and AltaGas
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Marine and AltaGas is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Marine Petroleum Trust and AltaGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltaGas and Marine Petroleum 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 Marine Petroleum Trust are associated (or correlated) with AltaGas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltaGas has no effect on the direction of Marine Petroleum i.e., Marine Petroleum and AltaGas go up and down completely randomly.
Pair Corralation between Marine Petroleum and AltaGas
Assuming the 90 days horizon Marine Petroleum is expected to generate 1.09 times less return on investment than AltaGas. In addition to that, Marine Petroleum is 1.64 times more volatile than AltaGas. It trades about 0.02 of its total potential returns per unit of risk. AltaGas is currently generating about 0.04 per unit of volatility. If you would invest 2,418 in AltaGas on August 27, 2024 and sell it today you would earn a total of 19.00 from holding AltaGas or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marine Petroleum Trust vs. AltaGas
Performance |
| Timeline |
| Marine Petroleum Trust |
| AltaGas |
Marine Petroleum and AltaGas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Petroleum and AltaGas
The main advantage of trading using opposite Marine Petroleum and AltaGas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Petroleum position performs unexpectedly, AltaGas 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 AltaGas will offset losses from the drop in AltaGas' long position.| Marine Petroleum vs. GasLog Partners LP | Marine Petroleum vs. GasLog Partners LP | Marine Petroleum vs. Brooge Holdings | Marine Petroleum vs. Dynagas LNG Partners |
| AltaGas vs. Navigator Holdings | AltaGas vs. Pembina Pipeline Corp | AltaGas vs. Marine Petroleum Trust | AltaGas 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |