Correlation Between NGL Energy and 00108WAF7
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By analyzing existing cross correlation between NGL Energy Partners and AEP TEX INC, you can compare the effects of market volatilities on NGL Energy and 00108WAF7 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 00108WAF7. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGL Energy and 00108WAF7.
Diversification Opportunities for NGL Energy and 00108WAF7
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NGL and 00108WAF7 is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding NGL Energy Partners and AEP TEX INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEP TEX INC 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 00108WAF7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEP TEX INC has no effect on the direction of NGL Energy i.e., NGL Energy and 00108WAF7 go up and down completely randomly.
Pair Corralation between NGL Energy and 00108WAF7
Considering the 90-day investment horizon NGL Energy Partners is expected to generate 0.49 times more return on investment than 00108WAF7. However, NGL Energy Partners is 2.05 times less risky than 00108WAF7. It trades about 0.27 of its potential returns per unit of risk. AEP TEX INC is currently generating about 0.12 per unit of risk. If you would invest 471.00 in NGL Energy Partners on October 21, 2024 and sell it today you would earn a total of 55.00 from holding NGL Energy Partners or generate 11.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.42% |
| Values | Daily Returns |
NGL Energy Partners vs. AEP TEX INC
Performance |
| Timeline |
| NGL Energy Partners |
| AEP TEX INC |
NGL Energy and 00108WAF7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NGL Energy and 00108WAF7
The main advantage of trading using opposite NGL Energy and 00108WAF7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NGL Energy position performs unexpectedly, 00108WAF7 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 00108WAF7 will offset losses from the drop in 00108WAF7's long position.| NGL Energy vs. NGL Energy Partners | NGL Energy vs. Dynagas LNG Partners | NGL Energy vs. Martin Midstream Partners | NGL Energy vs. Kinetik Holdings |
| 00108WAF7 vs. Delta Air Lines | 00108WAF7 vs. Air Lease | 00108WAF7 vs. Regeneron Pharmaceuticals | 00108WAF7 vs. Mesa Air Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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