Correlation Between Cheniere Energy and Sligro Food

Can any of the company-specific risk be diversified away by investing in both Cheniere Energy and Sligro Food 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 Sligro Food 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 Sligro Food Group, you can compare the effects of market volatilities on Cheniere Energy and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheniere Energy and Sligro Food.

Diversification Opportunities for Cheniere Energy and Sligro Food

-0.89

Correlation Coefficient

Cheniere Energy  Sligro Food

Pay attention - limited upside

The 3 months correlation between Cheniere and Sligro is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy Partners and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of Cheniere Energy i.e., Cheniere Energy and Sligro Food go up and down completely randomly.

Pair Corralation between Cheniere Energy and Sligro Food

Considering the 90-day investment horizon Cheniere Energy Partners is expected to generate 1.41 times more return on investment than Sligro Food. However, Cheniere Energy is 1.41 times more volatile than Sligro Food Group. It trades about 0.02 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.05 per unit of risk. If you would invest  4,698  in Cheniere Energy Partners on September 24, 2024 and sell it today you would earn a total of  504.00  from holding Cheniere Energy Partners or generate 10.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	90.16%
Values	Daily Returns

Cheniere Energy Partners  vs.  Sligro Food Group

Cheniere Energy Partners

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cheniere Energy Partners are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Cheniere Energy may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Sligro Food Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sligro Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Cheniere Energy and Sligro Food

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

The idea behind Cheniere Energy Partners and Sligro Food Group 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.