Correlation Between ONEOK and Dynagas LNG
Can any of the company-specific risk be diversified away by investing in both ONEOK 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 ONEOK and Dynagas LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and Dynagas LNG Partners, you can compare the effects of market volatilities on ONEOK 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 ONEOK with a short position of Dynagas LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and Dynagas LNG.
Diversification Opportunities for ONEOK and Dynagas LNG
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ONEOK and Dynagas is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc 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 ONEOK 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 ONEOK Inc 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 ONEOK i.e., ONEOK and Dynagas LNG go up and down completely randomly.
Pair Corralation between ONEOK and Dynagas LNG
Considering the 90-day investment horizon ONEOK Inc is expected to generate 0.55 times more return on investment than Dynagas LNG. However, ONEOK Inc is 1.83 times less risky than Dynagas LNG. It trades about 0.11 of its potential returns per unit of risk. Dynagas LNG Partners is currently generating about 0.05 per unit of risk. If you would invest 6,217 in ONEOK Inc on August 27, 2024 and sell it today you would earn a total of 5,488 from holding ONEOK Inc or generate 88.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ONEOK Inc vs. Dynagas LNG Partners
Performance |
| Timeline |
| ONEOK Inc |
| Dynagas LNG Partners |
ONEOK and Dynagas LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONEOK and Dynagas LNG
The main advantage of trading using opposite ONEOK and Dynagas LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK 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.| ONEOK vs. Enterprise Products Partners | ONEOK vs. MPLX LP | ONEOK vs. Energy Transfer LP | ONEOK vs. Plains All American |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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