Correlation Between Brooge Holdings and Genesis Energy

Can any of the company-specific risk be diversified away by investing in both Brooge Holdings and Genesis 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 Brooge Holdings and Genesis Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Brooge Holdings and Genesis Energy LP, you can compare the effects of market volatilities on Brooge Holdings and Genesis 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 Brooge Holdings with a short position of Genesis Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brooge Holdings and Genesis Energy.

Diversification Opportunities for Brooge Holdings and Genesis Energy

-0.03

Correlation Coefficient

Brooge Holdings  Genesis Energy

Good diversification

The 3 months correlation between Brooge and Genesis is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Brooge Holdings and Genesis Energy LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Energy LP and Brooge Holdings 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 Brooge Holdings are associated (or correlated) with Genesis Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Energy LP has no effect on the direction of Brooge Holdings i.e., Brooge Holdings and Genesis Energy go up and down completely randomly.

Pair Corralation between Brooge Holdings and Genesis Energy

Given the investment horizon of 90 days Brooge Holdings is expected to generate 3.39 times more return on investment than Genesis Energy. However, Brooge Holdings is 3.39 times more volatile than Genesis Energy LP. It trades about 0.09 of its potential returns per unit of risk. Genesis Energy LP is currently generating about -0.08 per unit of risk. If you would invest  108.00  in Brooge Holdings on August 31, 2024 and sell it today you would earn a total of  31.00  from holding Brooge Holdings or generate 28.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Brooge Holdings  vs.  Genesis Energy LP

Brooge Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brooge Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Brooge Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Genesis Energy LP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genesis Energy LP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Brooge Holdings and Genesis Energy

The main advantage of trading using opposite Brooge Holdings and Genesis Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brooge Holdings position performs unexpectedly, Genesis 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 Genesis Energy will offset losses from the drop in Genesis Energy's long position.

The idea behind Brooge Holdings and Genesis Energy LP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.