Correlation Between Enterprise Products and Marine Petroleum
Can any of the company-specific risk be diversified away by investing in both Enterprise Products and Marine Petroleum 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 Enterprise Products and Marine Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enterprise Products Partners and Marine Petroleum Trust, you can compare the effects of market volatilities on Enterprise Products and Marine Petroleum 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 Enterprise Products with a short position of Marine Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enterprise Products and Marine Petroleum.
Diversification Opportunities for Enterprise Products and Marine Petroleum
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Enterprise and Marine is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Products Partners and Marine Petroleum Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Petroleum Trust and Enterprise Products 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 Enterprise Products Partners are associated (or correlated) with Marine Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Petroleum Trust has no effect on the direction of Enterprise Products i.e., Enterprise Products and Marine Petroleum go up and down completely randomly.
Pair Corralation between Enterprise Products and Marine Petroleum
Considering the 90-day investment horizon Enterprise Products Partners is expected to under-perform the Marine Petroleum. In addition to that, Enterprise Products is 1.35 times more volatile than Marine Petroleum Trust. It trades about -0.14 of its total potential returns per unit of risk. Marine Petroleum Trust is currently generating about -0.19 per unit of volatility. If you would invest 395.00 in Marine Petroleum Trust on September 24, 2024 and sell it today you would lose (16.00) from holding Marine Petroleum Trust or give up 4.05% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Enterprise Products Partners vs. Marine Petroleum Trust
Performance |
Timeline |
Enterprise Products |
Marine Petroleum Trust |
Enterprise Products and Marine Petroleum Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enterprise Products and Marine Petroleum
The main advantage of trading using opposite Enterprise Products and Marine Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enterprise Products position performs unexpectedly, Marine Petroleum 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 Marine Petroleum will offset losses from the drop in Marine Petroleum's long position.Enterprise Products vs. United Maritime | Enterprise Products vs. Globus Maritime | Enterprise Products vs. Castor Maritime | Enterprise Products vs. Safe Bulkers |
Marine Petroleum vs. GasLog Partners LP | Marine Petroleum vs. Dynagas LNG Partners | Marine Petroleum vs. Imperial Petroleum Preferred | Marine Petroleum vs. Mirage Energy Corp |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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