Correlation Between Magellan Midstream and Genesis Energy
Can any of the company-specific risk be diversified away by investing in both Magellan Midstream 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 Magellan Midstream and Genesis Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magellan Midstream Partners and Genesis Energy LP, you can compare the effects of market volatilities on Magellan Midstream 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 Magellan Midstream with a short position of Genesis Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magellan Midstream and Genesis Energy.
Diversification Opportunities for Magellan Midstream and Genesis Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Magellan and Genesis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Magellan Midstream Partners 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 Magellan Midstream 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 Magellan Midstream Partners 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 Magellan Midstream i.e., Magellan Midstream and Genesis Energy go up and down completely randomly.
Pair Corralation between Magellan Midstream and Genesis Energy
If you would invest 988.00 in Genesis Energy LP on December 29, 2024 and sell it today you would earn a total of 588.00 from holding Genesis Energy LP or generate 59.51% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Magellan Midstream Partners vs. Genesis Energy LP
Performance |
Timeline |
Magellan Midstream |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Genesis Energy LP |
Magellan Midstream and Genesis Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Magellan Midstream and Genesis Energy
The main advantage of trading using opposite Magellan Midstream and Genesis Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magellan Midstream 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.Magellan Midstream vs. Kinder Morgan | Magellan Midstream vs. Enterprise Products Partners | Magellan Midstream vs. Williams Companies | Magellan Midstream vs. MPLX LP |
Genesis Energy vs. Brooge Holdings | Genesis Energy vs. Plains All American | Genesis Energy vs. Western Midstream Partners | Genesis Energy vs. Hess Midstream Partners |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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