Correlation Between International Seaways and EnLink Midstream

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

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

Diversification Opportunities for International Seaways and EnLink Midstream

-0.82

Correlation Coefficient

International Seaways  EnLink Midstream

Pay attention - limited upside

The 3 months correlation between International and EnLink is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding International Seaways 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 International Seaways 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 International Seaways 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 International Seaways i.e., International Seaways and EnLink Midstream go up and down completely randomly.

Pair Corralation between International Seaways and EnLink Midstream

Given the investment horizon of 90 days International Seaways is expected to under-perform the EnLink Midstream. In addition to that, International Seaways is 2.11 times more volatile than EnLink Midstream LLC. It trades about -0.14 of its total potential returns per unit of risk. EnLink Midstream LLC is currently generating about 0.16 per unit of volatility. If you would invest  1,418  in EnLink Midstream LLC on September 5, 2024 and sell it today you would earn a total of  137.00  from holding EnLink Midstream LLC or generate 9.66% return on investment over 90 days.

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

International Seaways  vs.  EnLink Midstream LLC

International Seaways

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Seaways has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

EnLink Midstream LLC

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EnLink Midstream LLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, EnLink Midstream may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with International Seaways and EnLink Midstream

The main advantage of trading using opposite International Seaways and EnLink Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Seaways 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 International Seaways 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.