Correlation Between Cheniere Energy and Xiabuxiabu Catering

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

Diversification Opportunities for Cheniere Energy and Xiabuxiabu Catering

-0.27

Correlation Coefficient

Cheniere Energy  Xiabuxiabu Catering

Very good diversification

The 3 months correlation between Cheniere and Xiabuxiabu is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy Partners and Xiabuxiabu Catering Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiabuxiabu Catering 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 Xiabuxiabu Catering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiabuxiabu Catering has no effect on the direction of Cheniere Energy i.e., Cheniere Energy and Xiabuxiabu Catering go up and down completely randomly.

Pair Corralation between Cheniere Energy and Xiabuxiabu Catering

Considering the 90-day investment horizon Cheniere Energy Partners is expected to under-perform the Xiabuxiabu Catering. But the stock apears to be less risky and, when comparing its historical volatility, Cheniere Energy Partners is 1.09 times less risky than Xiabuxiabu Catering. The stock trades about -0.09 of its potential returns per unit of risk. The Xiabuxiabu Catering Management is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Xiabuxiabu Catering Management on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Xiabuxiabu Catering Management or generate 0.0% return on investment over 90 days.

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

Cheniere Energy Partners  vs.  Xiabuxiabu Catering Management

Cheniere Energy Partners

Risk-Adjusted Performance

9 of 100

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.

Xiabuxiabu Catering

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xiabuxiabu Catering Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Xiabuxiabu Catering is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cheniere Energy and Xiabuxiabu Catering

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

The idea behind Cheniere Energy Partners and Xiabuxiabu Catering Management 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.