Correlation Between Plains All and Equitrans Midstream
Can any of the company-specific risk be diversified away by investing in both Plains All and Equitrans 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 Plains All and Equitrans Midstream 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 Equitrans Midstream Corp, you can compare the effects of market volatilities on Plains All and Equitrans 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 Plains All with a short position of Equitrans Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plains All and Equitrans Midstream.
Diversification Opportunities for Plains All and Equitrans Midstream
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Plains and Equitrans is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Plains All American and Equitrans Midstream Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitrans Midstream Corp 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 Equitrans Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitrans Midstream Corp has no effect on the direction of Plains All i.e., Plains All and Equitrans Midstream go up and down completely randomly.
Pair Corralation between Plains All and Equitrans Midstream
If you would invest 1,644 in Plains All American on August 28, 2024 and sell it today you would earn a total of 113.00 from holding Plains All American or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Plains All American vs. Equitrans Midstream Corp
Performance |
| Timeline |
| Plains All American |
| Equitrans Midstream Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Plains All and Equitrans Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plains All and Equitrans Midstream
The main advantage of trading using opposite Plains All and Equitrans Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plains All position performs unexpectedly, Equitrans 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 Equitrans Midstream will offset losses from the drop in Equitrans Midstream's long position.| Plains All vs. Genesis Energy LP | Plains All vs. Western Midstream Partners | Plains All vs. Hess Midstream Partners | Plains All vs. Enterprise Products Partners |
| Equitrans Midstream vs. MPLX LP | Equitrans Midstream vs. Plains All American | Equitrans Midstream vs. Hess Midstream Partners | Equitrans Midstream vs. Plains GP Holdings |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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