Correlation Between Marine Petroleum and Hess Midstream
Can any of the company-specific risk be diversified away by investing in both Marine Petroleum and Hess Midstream 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 Hess Midstream 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 Hess Midstream Partners, you can compare the effects of market volatilities on Marine Petroleum and Hess Midstream 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 Hess Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Petroleum and Hess Midstream.
Diversification Opportunities for Marine Petroleum and Hess Midstream
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Marine and Hess is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Marine Petroleum Trust and Hess Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hess Midstream Partners 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 Hess Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hess Midstream Partners has no effect on the direction of Marine Petroleum i.e., Marine Petroleum and Hess Midstream go up and down completely randomly.
Pair Corralation between Marine Petroleum and Hess Midstream
Assuming the 90 days horizon Marine Petroleum is expected to generate 1.25 times less return on investment than Hess Midstream. In addition to that, Marine Petroleum is 2.08 times more volatile than Hess Midstream Partners. It trades about 0.03 of its total potential returns per unit of risk. Hess Midstream Partners is currently generating about 0.08 per unit of volatility. If you would invest 3,586 in Hess Midstream Partners on September 2, 2024 and sell it today you would earn a total of 204.00 from holding Hess Midstream Partners or generate 5.69% 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. Hess Midstream Partners
Performance |
| Timeline |
| Marine Petroleum Trust |
| Hess Midstream Partners |
Marine Petroleum and Hess Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marine Petroleum and Hess Midstream
The main advantage of trading using opposite Marine Petroleum and Hess Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marine Petroleum position performs unexpectedly, Hess Midstream 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 Hess Midstream will offset losses from the drop in Hess Midstream'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 |
| Hess Midstream vs. MPLX LP | Hess Midstream vs. Western Midstream Partners | Hess Midstream vs. Plains All American | Hess Midstream vs. Antero Midstream 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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