Correlation Between NuStar Energy and Enterprise Products

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

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

Diversification Opportunities for NuStar Energy and Enterprise Products

0.0

Correlation Coefficient

NuStar Energy  Enterprise Products

Pay attention - limited upside

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

Pair Corralation between NuStar Energy and Enterprise Products

If you would invest  3,071  in Enterprise Products Partners on December 29, 2024 and sell it today you would earn a total of  324.00  from holding Enterprise Products Partners or generate 10.55% return on investment over 90 days.

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

NuStar Energy LP  vs.  Enterprise Products Partners

NuStar Energy LP

Risk-Adjusted Performance

Very Weak

Over the last 90 days NuStar Energy LP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, NuStar Energy is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Enterprise Products

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enterprise Products Partners are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Enterprise Products may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NuStar Energy and Enterprise Products

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

The idea behind NuStar Energy LP and Enterprise Products Partners 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..