Correlation Between NGL Energy and Atlantica Sustainable

Can any of the company-specific risk be diversified away by investing in both NGL Energy and Atlantica Sustainable 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 NGL Energy and Atlantica Sustainable into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NGL Energy Partners and Atlantica Sustainable Infrastructure, you can compare the effects of market volatilities on NGL Energy and Atlantica Sustainable 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 NGL Energy with a short position of Atlantica Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGL Energy and Atlantica Sustainable.

Diversification Opportunities for NGL Energy and Atlantica Sustainable

0.0

Correlation Coefficient

NGL Energy  Atlantica Sustainable

Pay attention - limited upside

The 3 months correlation between NGL and Atlantica is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NGL Energy Partners and Atlantica Sustainable Infrastr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantica Sustainable and NGL Energy 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 NGL Energy Partners are associated (or correlated) with Atlantica Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantica Sustainable has no effect on the direction of NGL Energy i.e., NGL Energy and Atlantica Sustainable go up and down completely randomly.

Pair Corralation between NGL Energy and Atlantica Sustainable

If you would invest  481.00  in NGL Energy Partners on December 28, 2024 and sell it today you would lose (18.00) from holding NGL Energy Partners or give up 3.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NGL Energy Partners  vs.  Atlantica Sustainable Infrastr

NGL Energy Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days NGL Energy Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, NGL Energy is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Atlantica Sustainable

Risk-Adjusted Performance

Very Weak

Over the last 90 days Atlantica Sustainable Infrastructure has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Atlantica Sustainable is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NGL Energy and Atlantica Sustainable

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

The idea behind NGL Energy Partners and Atlantica Sustainable Infrastructure 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.