Correlation Between Excelerate Energy and Seapeak LLC

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

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

Diversification Opportunities for Excelerate Energy and Seapeak LLC

0.63

Correlation Coefficient

Excelerate Energy  Seapeak LLC

Poor diversification

The 3 months correlation between Excelerate and Seapeak is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Excelerate Energy and Seapeak LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seapeak LLC and Excelerate 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 Excelerate Energy are associated (or correlated) with Seapeak LLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seapeak LLC has no effect on the direction of Excelerate Energy i.e., Excelerate Energy and Seapeak LLC go up and down completely randomly.

Pair Corralation between Excelerate Energy and Seapeak LLC

Allowing for the 90-day total investment horizon Excelerate Energy is expected to generate 6.28 times more return on investment than Seapeak LLC. However, Excelerate Energy is 6.28 times more volatile than Seapeak LLC. It trades about 0.01 of its potential returns per unit of risk. Seapeak LLC is currently generating about -0.02 per unit of risk. If you would invest  3,008  in Excelerate Energy on September 26, 2024 and sell it today you would lose (3.00) from holding Excelerate Energy or give up 0.1% of portfolio value over 90 days.

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

Excelerate Energy  vs.  Seapeak LLC

Excelerate Energy

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Excelerate Energy are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Excelerate Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Seapeak LLC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Seapeak LLC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Seapeak LLC is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Excelerate Energy and Seapeak LLC

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

The idea behind Excelerate Energy and Seapeak LLC 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.