Correlation Between NGL Energy and CHKEL Old
Can any of the company-specific risk be diversified away by investing in both NGL Energy and CHKEL Old 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 NGL Energy and CHKEL Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NGL Energy Partners and CHKEL Old, you can compare the effects of market volatilities on NGL Energy and CHKEL Old 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 NGL Energy with a short position of CHKEL Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGL Energy and CHKEL Old.
Diversification Opportunities for NGL Energy and CHKEL Old
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NGL and CHKEL is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding NGL Energy Partners and CHKEL Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHKEL Old and NGL Energy 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 NGL Energy Partners are associated (or correlated) with CHKEL Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHKEL Old has no effect on the direction of NGL Energy i.e., NGL Energy and CHKEL Old go up and down completely randomly.
Pair Corralation between NGL Energy and CHKEL Old
If you would invest 2,380 in NGL Energy Partners on November 5, 2024 and sell it today you would earn a total of 18.00 from holding NGL Energy Partners or generate 0.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 5.26% |
| Values | Daily Returns |
NGL Energy Partners vs. CHKEL Old
Performance |
| Timeline |
| NGL Energy Partners |
| CHKEL Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
NGL Energy and CHKEL Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NGL Energy and CHKEL Old
The main advantage of trading using opposite NGL Energy and CHKEL Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NGL Energy position performs unexpectedly, CHKEL Old 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 CHKEL Old will offset losses from the drop in CHKEL Old's long position.| NGL Energy vs. NGL Energy Partners | NGL Energy vs. Dynagas LNG Partners | NGL Energy vs. GasLog Partners LP | NGL Energy vs. GasLog Partners LP |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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