Correlation Between Genesis Energy and Crestwood Equity

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

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

Diversification Opportunities for Genesis Energy and Crestwood Equity

0.0

Correlation Coefficient

Genesis Energy  Crestwood Equity

Pay attention - limited upside

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

Pair Corralation between Genesis Energy and Crestwood Equity

If you would invest  988.00  in Genesis Energy LP on December 29, 2024 and sell it today you would earn a total of  583.00  from holding Genesis Energy LP or generate 59.01% return on investment over 90 days.

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

Genesis Energy LP  vs.  Crestwood Equity Partners

Genesis Energy LP

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Genesis Energy LP are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Genesis Energy disclosed solid returns over the last few months and may actually be approaching a breakup point.

Crestwood Equity Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days Crestwood Equity Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Crestwood Equity is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Genesis Energy and Crestwood Equity

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

The idea behind Genesis Energy LP and Crestwood Equity Partners 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.