Correlation Between GasLog Partners and Via Renewables

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

Diversification Opportunities for GasLog Partners and Via Renewables

0.88

Correlation Coefficient

GasLog Partners  Via Renewables

Very poor diversification

The 3 months correlation between GasLog and Via is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding GasLog Partners LP and Via Renewables in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Renewables 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 Via Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Renewables has no effect on the direction of GasLog Partners i.e., GasLog Partners and Via Renewables go up and down completely randomly.

Pair Corralation between GasLog Partners and Via Renewables

Assuming the 90 days trading horizon GasLog Partners is expected to generate 1.33 times less return on investment than Via Renewables. But when comparing it to its historical volatility, GasLog Partners LP is 1.48 times less risky than Via Renewables. It trades about 0.15 of its potential returns per unit of risk. Via Renewables is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,287  in Via Renewables on December 29, 2024 and sell it today you would earn a total of  129.00  from holding Via Renewables or generate 5.64% return on investment over 90 days.

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

GasLog Partners LP  vs.  Via Renewables

GasLog Partners LP

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GasLog Partners LP are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, GasLog Partners is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Via Renewables

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Via Renewables is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with GasLog Partners and Via Renewables

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

The idea behind GasLog Partners LP and Via Renewables 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.