Correlation Between NuStar Energy and Dynagas LNG
Can any of the company-specific risk be diversified away by investing in both NuStar Energy and Dynagas LNG 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 NuStar Energy and Dynagas LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NuStar Energy LP and Dynagas LNG Partners, you can compare the effects of market volatilities on NuStar Energy and Dynagas LNG 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 NuStar Energy with a short position of Dynagas LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of NuStar Energy and Dynagas LNG.
Diversification Opportunities for NuStar Energy and Dynagas LNG
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NuStar and Dynagas is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NuStar Energy LP and Dynagas LNG Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynagas LNG Partners and NuStar 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 NuStar Energy LP are associated (or correlated) with Dynagas LNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynagas LNG Partners has no effect on the direction of NuStar Energy i.e., NuStar Energy and Dynagas LNG go up and down completely randomly.
Pair Corralation between NuStar Energy and Dynagas LNG
If you would invest 381.00 in Dynagas LNG Partners on September 4, 2024 and sell it today you would earn a total of 97.00 from holding Dynagas LNG Partners or generate 25.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
NuStar Energy LP vs. Dynagas LNG Partners
Performance |
| Timeline |
| NuStar Energy LP |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Dynagas LNG Partners |
NuStar Energy and Dynagas LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NuStar Energy and Dynagas LNG
The main advantage of trading using opposite NuStar Energy and Dynagas LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NuStar Energy position performs unexpectedly, Dynagas LNG 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 Dynagas LNG will offset losses from the drop in Dynagas LNG's long position.| NuStar Energy vs. MPLX LP | NuStar Energy vs. Western Midstream Partners | NuStar Energy vs. Plains All American | NuStar Energy vs. Genesis Energy LP |
| Dynagas LNG vs. Tidewater Midstream and | Dynagas LNG vs. Martin Midstream Partners | Dynagas LNG vs. Kinetik Holdings | Dynagas LNG vs. Dynagas LNG 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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