Correlation Between NuStar Energy and Magellan Midstream
Can any of the company-specific risk be diversified away by investing in both NuStar Energy and Magellan Midstream 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 Magellan Midstream 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 Magellan Midstream Partners, you can compare the effects of market volatilities on NuStar Energy and Magellan Midstream 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 Magellan Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of NuStar Energy and Magellan Midstream.
Diversification Opportunities for NuStar Energy and Magellan Midstream
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NuStar and Magellan is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding NuStar Energy LP and Magellan Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Midstream 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 Magellan Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Midstream has no effect on the direction of NuStar Energy i.e., NuStar Energy and Magellan Midstream go up and down completely randomly.
Pair Corralation between NuStar Energy and Magellan Midstream
If you would invest 6,551 in Magellan Midstream Partners on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Magellan Midstream Partners or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NuStar Energy LP vs. Magellan Midstream Partners
Performance |
| Timeline |
| NuStar Energy LP |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Magellan Midstream |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
NuStar Energy and Magellan Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NuStar Energy and Magellan Midstream
The main advantage of trading using opposite NuStar Energy and Magellan Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NuStar Energy position performs unexpectedly, Magellan Midstream 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 Magellan Midstream will offset losses from the drop in Magellan Midstream'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 |
| Magellan Midstream vs. Kinder Morgan | Magellan Midstream vs. Enterprise Products Partners | Magellan Midstream vs. Williams Companies | Magellan Midstream vs. MPLX 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 Stocks Directory module to find actively traded stocks across global markets.
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