Correlation Between Safe Bulkers and Cheniere Energy
Can any of the company-specific risk be diversified away by investing in both Safe Bulkers and Cheniere Energy 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 Safe Bulkers and Cheniere Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safe Bulkers and Cheniere Energy Partners, you can compare the effects of market volatilities on Safe Bulkers and Cheniere Energy 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 Safe Bulkers with a short position of Cheniere Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safe Bulkers and Cheniere Energy.
Diversification Opportunities for Safe Bulkers and Cheniere Energy
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Safe and Cheniere is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Safe Bulkers and Cheniere Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheniere Energy Partners and Safe Bulkers 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 Safe Bulkers are associated (or correlated) with Cheniere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheniere Energy Partners has no effect on the direction of Safe Bulkers i.e., Safe Bulkers and Cheniere Energy go up and down completely randomly.
Pair Corralation between Safe Bulkers and Cheniere Energy
Allowing for the 90-day total investment horizon Safe Bulkers is expected to under-perform the Cheniere Energy. But the stock apears to be less risky and, when comparing its historical volatility, Safe Bulkers is 1.03 times less risky than Cheniere Energy. The stock trades about -0.09 of its potential returns per unit of risk. The Cheniere Energy Partners is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 5,812 in Cheniere Energy Partners on October 14, 2024 and sell it today you would lose (222.00) from holding Cheniere Energy Partners or give up 3.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safe Bulkers vs. Cheniere Energy Partners
Performance |
| Timeline |
| Safe Bulkers |
| Cheniere Energy Partners |
Safe Bulkers and Cheniere Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safe Bulkers and Cheniere Energy
The main advantage of trading using opposite Safe Bulkers and Cheniere Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safe Bulkers position performs unexpectedly, Cheniere Energy 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 Cheniere Energy will offset losses from the drop in Cheniere Energy's long position.| Safe Bulkers vs. Global Ship Lease | Safe Bulkers vs. Costamare | Safe Bulkers vs. Navios Maritime Partners | Safe Bulkers vs. Genco Shipping Trading |
| Cheniere Energy vs. Plains All American | Cheniere Energy vs. Genesis Energy LP | Cheniere Energy vs. Western Midstream Partners | Cheniere Energy vs. Hess Midstream 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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