Correlation Between Marine Petroleum and Energy Transfer
Can any of the company-specific risk be diversified away by investing in both Marine Petroleum 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 Marine Petroleum and Energy Transfer 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 Energy Transfer LP, you can compare the effects of market volatilities on Marine Petroleum 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 Marine Petroleum with a short position of Energy Transfer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Petroleum and Energy Transfer.
Diversification Opportunities for Marine Petroleum and Energy Transfer
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marine and Energy is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Marine Petroleum Trust 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 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 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 Marine Petroleum i.e., Marine Petroleum and Energy Transfer go up and down completely randomly.
Pair Corralation between Marine Petroleum and Energy Transfer
Assuming the 90 days horizon Marine Petroleum Trust is expected to generate 5.4 times more return on investment than Energy Transfer. However, Marine Petroleum is 5.4 times more volatile than Energy Transfer LP. It trades about 0.44 of its potential returns per unit of risk. Energy Transfer LP is currently generating about -0.25 per unit of risk. If you would invest 376.00 in Marine Petroleum Trust on October 23, 2024 and sell it today you would earn a total of 61.00 from holding Marine Petroleum Trust or generate 16.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marine Petroleum Trust vs. Energy Transfer LP
Performance |
| Timeline |
| Marine Petroleum Trust |
| Energy Transfer LP |
Marine Petroleum and Energy Transfer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Petroleum and Energy Transfer
The main advantage of trading using opposite Marine Petroleum and Energy Transfer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Petroleum 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.| Marine Petroleum vs. GasLog Partners LP | Marine Petroleum vs. GasLog Partners LP | Marine Petroleum vs. Brooge Holdings | Marine Petroleum vs. Dynagas LNG Partners |
| Energy Transfer vs. Loews Corp | Energy Transfer vs. Juniata Valley Financial | Energy Transfer vs. The Hanover Insurance | Energy Transfer vs. Goosehead Insurance |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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