Correlation Between GasLog Partners and Genesis Energy

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

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

Diversification Opportunities for GasLog Partners and Genesis Energy

-0.44

Correlation Coefficient

GasLog Partners  Genesis Energy

Very good diversification

The 3 months correlation between GasLog and Genesis is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding GasLog Partners LP and Genesis Energy LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genesis Energy LP and GasLog Partners 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 GasLog Partners LP are associated (or correlated) with Genesis Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genesis Energy LP has no effect on the direction of GasLog Partners i.e., GasLog Partners and Genesis Energy go up and down completely randomly.

Pair Corralation between GasLog Partners and Genesis Energy

Assuming the 90 days trading horizon GasLog Partners LP is expected to generate 0.48 times more return on investment than Genesis Energy. However, GasLog Partners LP is 2.1 times less risky than Genesis Energy. It trades about 0.05 of its potential returns per unit of risk. Genesis Energy LP is currently generating about 0.02 per unit of risk. If you would invest  2,064  in GasLog Partners LP on October 10, 2024 and sell it today you would earn a total of  504.00  from holding GasLog Partners LP or generate 24.42% return on investment over 90 days.

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

GasLog Partners LP  vs.  Genesis Energy LP

GasLog Partners LP

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GasLog Partners LP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, GasLog Partners is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Genesis Energy LP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genesis Energy LP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with GasLog Partners and Genesis Energy

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

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