Correlation Between Plains All and Energy Transfer
Can any of the company-specific risk be diversified away by investing in both Plains All and Energy Transfer 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 Plains All and Energy Transfer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plains All American and Energy Transfer LP, you can compare the effects of market volatilities on Plains All and Energy Transfer 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 Plains All with a short position of Energy Transfer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plains All and Energy Transfer.
Diversification Opportunities for Plains All and Energy Transfer
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Plains and Energy is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Plains All American and Energy Transfer LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Transfer LP and Plains All 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 Plains All American are associated (or correlated) with Energy Transfer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Transfer LP has no effect on the direction of Plains All i.e., Plains All and Energy Transfer go up and down completely randomly.
Pair Corralation between Plains All and Energy Transfer
Considering the 90-day investment horizon Plains All is expected to generate 2.59 times less return on investment than Energy Transfer. In addition to that, Plains All is 1.14 times more volatile than Energy Transfer LP. It trades about 0.21 of its total potential returns per unit of risk. Energy Transfer LP is currently generating about 0.62 per unit of volatility. If you would invest 1,608 in Energy Transfer LP on August 24, 2024 and sell it today you would earn a total of 289.00 from holding Energy Transfer LP or generate 17.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plains All American vs. Energy Transfer LP
Performance |
| Timeline |
| Plains All American |
| Energy Transfer LP |
Plains All and Energy Transfer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plains All and Energy Transfer
The main advantage of trading using opposite Plains All and Energy Transfer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plains All position performs unexpectedly, Energy Transfer 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 Energy Transfer will offset losses from the drop in Energy Transfer's long position.| Plains All vs. ONEOK Inc | Plains All vs. Enterprise Products Partners | Plains All vs. Energy Transfer LP | Plains All vs. Kinder Morgan |
| Energy Transfer vs. Western Midstream Partners | Energy Transfer vs. MPLX LP | Energy Transfer vs. Hess Midstream Partners | Energy Transfer vs. Plains All American |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |