Correlation Between Cheniere Energy and Beneficient

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

By analyzing existing cross correlation between Cheniere Energy Partners and Beneficient Class A, you can compare the effects of market volatilities on Cheniere Energy and Beneficient 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 Cheniere Energy with a short position of Beneficient. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheniere Energy and Beneficient.

Diversification Opportunities for Cheniere Energy and Beneficient

-0.49

Correlation Coefficient

Cheniere Energy  Beneficient

Very good diversification

The 3 months correlation between Cheniere and Beneficient is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy Partners and Beneficient Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beneficient Class and Cheniere Energy 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 Cheniere Energy Partners are associated (or correlated) with Beneficient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beneficient Class has no effect on the direction of Cheniere Energy i.e., Cheniere Energy and Beneficient go up and down completely randomly.

Pair Corralation between Cheniere Energy and Beneficient

Considering the 90-day investment horizon Cheniere Energy Partners is expected to generate 0.44 times more return on investment than Beneficient. However, Cheniere Energy Partners is 2.25 times less risky than Beneficient. It trades about 0.12 of its potential returns per unit of risk. Beneficient Class A is currently generating about -0.18 per unit of risk. If you would invest  5,323  in Cheniere Energy Partners on December 24, 2024 and sell it today you would earn a total of  866.00  from holding Cheniere Energy Partners or generate 16.27% return on investment over 90 days.

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

Cheniere Energy Partners  vs.  Beneficient Class A

Cheniere Energy Partners

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cheniere Energy Partners are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Cheniere Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Beneficient Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beneficient Class A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Cheniere Energy and Beneficient

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

The idea behind Cheniere Energy Partners and Beneficient Class A 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.