Correlation Between SMLP Old and Dynagas LNG
Can any of the company-specific risk be diversified away by investing in both SMLP Old 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 SMLP Old and Dynagas LNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SMLP Old and Dynagas LNG Partners, you can compare the effects of market volatilities on SMLP Old 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 SMLP Old with a short position of Dynagas LNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMLP Old and Dynagas LNG.
Diversification Opportunities for SMLP Old and Dynagas LNG
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SMLP and Dynagas is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding SMLP Old 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 SMLP Old 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 SMLP Old 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 SMLP Old i.e., SMLP Old and Dynagas LNG go up and down completely randomly.
Pair Corralation between SMLP Old and Dynagas LNG
If you would invest (100.00) in SMLP Old on October 20, 2024 and sell it today you would earn a total of 100.00 from holding SMLP Old or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.0% |
| Values | Daily Returns |
SMLP Old vs. Dynagas LNG Partners
Performance |
| Timeline |
| SMLP Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Dynagas LNG Partners |
SMLP Old and Dynagas LNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SMLP Old and Dynagas LNG
The main advantage of trading using opposite SMLP Old and Dynagas LNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SMLP Old 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.| SMLP Old vs. Genesis Energy LP | SMLP Old vs. Brooge Holdings | SMLP Old vs. Hess Midstream Partners | SMLP Old vs. DT Midstream |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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