Correlation Between Keyera Corp and Marine Petroleum

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

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

Diversification Opportunities for Keyera Corp and Marine Petroleum

0.23

Correlation Coefficient

Keyera Corp  Marine Petroleum

Modest diversification

The 3 months correlation between Keyera and Marine is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Keyera Corp and Marine Petroleum Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Petroleum Trust and Keyera Corp 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 Keyera Corp are associated (or correlated) with Marine Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Petroleum Trust has no effect on the direction of Keyera Corp i.e., Keyera Corp and Marine Petroleum go up and down completely randomly.

Pair Corralation between Keyera Corp and Marine Petroleum

Assuming the 90 days horizon Keyera Corp is expected to generate 0.39 times more return on investment than Marine Petroleum. However, Keyera Corp is 2.55 times less risky than Marine Petroleum. It trades about 0.09 of its potential returns per unit of risk. Marine Petroleum Trust is currently generating about 0.0 per unit of risk. If you would invest  2,282  in Keyera Corp on October 5, 2024 and sell it today you would earn a total of  784.00  from holding Keyera Corp or generate 34.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.68%
Values	Daily Returns

Keyera Corp  vs.  Marine Petroleum Trust

Keyera Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keyera Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Keyera Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Marine Petroleum Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marine Petroleum Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Keyera Corp and Marine Petroleum

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

The idea behind Keyera Corp and Marine Petroleum Trust 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.