Correlation Between Marine Petroleum and SMLP Old

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

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

Diversification Opportunities for Marine Petroleum and SMLP Old

0.41

Correlation Coefficient

Marine Petroleum  SMLP Old

Very weak diversification

The 3 months correlation between Marine and SMLP is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Marine Petroleum Trust and SMLP Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMLP Old and Marine Petroleum 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 Marine Petroleum Trust are associated (or correlated) with SMLP Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMLP Old has no effect on the direction of Marine Petroleum i.e., Marine Petroleum and SMLP Old go up and down completely randomly.

Pair Corralation between Marine Petroleum and SMLP Old

If you would invest  400.00  in Marine Petroleum Trust on October 24, 2024 and sell it today you would earn a total of  72.00  from holding Marine Petroleum Trust or generate 18.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.0%
Values	Daily Returns

Marine Petroleum Trust  vs.  SMLP Old

Marine Petroleum Trust

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Marine Petroleum Trust are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Marine Petroleum unveiled solid returns over the last few months and may actually be approaching a breakup point.

SMLP Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SMLP Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, SMLP Old 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 Marine Petroleum and SMLP Old

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

The idea behind Marine Petroleum Trust and SMLP Old 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.