Correlation Between Martin Midstream and Genesis Energy
Can any of the company-specific risk be diversified away by investing in both Martin Midstream and Genesis Energy 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 Genesis Energy 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 Genesis Energy LP, you can compare the effects of market volatilities on Martin Midstream and Genesis Energy 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 Genesis Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Martin Midstream and Genesis Energy.
Diversification Opportunities for Martin Midstream and Genesis Energy
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Martin and Genesis is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Martin Midstream Partners and Genesis Energy LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Energy LP 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 Genesis Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Energy LP has no effect on the direction of Martin Midstream i.e., Martin Midstream and Genesis Energy go up and down completely randomly.
Pair Corralation between Martin Midstream and Genesis Energy
Given the investment horizon of 90 days Martin Midstream Partners is expected to generate 1.56 times more return on investment than Genesis Energy. However, Martin Midstream is 1.56 times more volatile than Genesis Energy LP. It trades about 0.16 of its potential returns per unit of risk. Genesis Energy LP is currently generating about 0.13 per unit of risk. If you would invest 342.00 in Martin Midstream Partners on November 2, 2024 and sell it today you would earn a total of 28.00 from holding Martin Midstream Partners or generate 8.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Martin Midstream Partners vs. Genesis Energy LP
Performance |
| Timeline |
| Martin Midstream Partners |
| Genesis Energy LP |
Martin Midstream and Genesis Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Martin Midstream and Genesis Energy
The main advantage of trading using opposite Martin Midstream and Genesis Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Martin Midstream position performs unexpectedly, Genesis Energy 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 Genesis Energy will offset losses from the drop in Genesis Energy's 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 |
| Genesis Energy vs. Brooge Holdings | Genesis Energy vs. Plains All American | Genesis Energy vs. Western Midstream Partners | Genesis Energy vs. Hess 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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