Correlation Between Equitrans Midstream and EnLink Midstream

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

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

Diversification Opportunities for Equitrans Midstream and EnLink Midstream

0.0

Correlation Coefficient

Equitrans Midstream  EnLink Midstream

Pay attention - limited upside

The 3 months correlation between Equitrans and EnLink is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Equitrans Midstream Corp and EnLink Midstream LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EnLink Midstream LLC and Equitrans Midstream 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 Equitrans Midstream Corp are associated (or correlated) with EnLink Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EnLink Midstream LLC has no effect on the direction of Equitrans Midstream i.e., Equitrans Midstream and EnLink Midstream go up and down completely randomly.

Pair Corralation between Equitrans Midstream and EnLink Midstream

If you would invest (100.00) in Equitrans Midstream Corp on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Equitrans Midstream Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Equitrans Midstream Corp  vs.  EnLink Midstream LLC

Equitrans Midstream Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equitrans Midstream Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Equitrans Midstream is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

EnLink Midstream LLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days EnLink Midstream LLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, EnLink Midstream is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Equitrans Midstream and EnLink Midstream

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

The idea behind Equitrans Midstream Corp and EnLink Midstream 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.

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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.