Correlation Between Martin Midstream and AltaGas
Can any of the company-specific risk be diversified away by investing in both Martin Midstream 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 Martin Midstream and AltaGas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Martin Midstream Partners and AltaGas, you can compare the effects of market volatilities on Martin Midstream 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 Martin Midstream with a short position of AltaGas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Midstream and AltaGas.
Diversification Opportunities for Martin Midstream and AltaGas
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Martin and AltaGas is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Martin Midstream Partners and AltaGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltaGas and Martin Midstream 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 Martin Midstream Partners 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 Martin Midstream i.e., Martin Midstream and AltaGas go up and down completely randomly.
Pair Corralation between Martin Midstream and AltaGas
Given the investment horizon of 90 days Martin Midstream Partners is expected to generate 1.29 times more return on investment than AltaGas. However, Martin Midstream is 1.29 times more volatile than AltaGas. It trades about 0.11 of its potential returns per unit of risk. AltaGas is currently generating about -0.04 per unit of risk. If you would invest 359.00 in Martin Midstream Partners on August 28, 2024 and sell it today you would earn a total of 41.00 from holding Martin Midstream Partners or generate 11.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Midstream Partners vs. AltaGas
Performance |
| Timeline |
| Martin Midstream Partners |
| AltaGas |
Martin Midstream and AltaGas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Midstream and AltaGas
The main advantage of trading using opposite Martin Midstream and AltaGas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Midstream 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.| Martin Midstream vs. Western Midstream Partners | Martin Midstream vs. EnLink Midstream LLC | Martin Midstream vs. Kinetik Holdings | Martin Midstream vs. NGL Energy Partners |
| AltaGas vs. TransAlta Corp | AltaGas vs. Pampa Energia SA | AltaGas vs. Vistra Energy Corp | AltaGas vs. NRG Energy |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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