Correlation Between NuStar Energy and Tidewater Midstream

Can any of the company-specific risk be diversified away by investing in both NuStar Energy and Tidewater Midstream 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 Tidewater Midstream 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 Tidewater Midstream and, you can compare the effects of market volatilities on NuStar Energy and Tidewater Midstream 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 Tidewater Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of NuStar Energy and Tidewater Midstream.

Diversification Opportunities for NuStar Energy and Tidewater Midstream

0.0

Correlation Coefficient

NuStar Energy  Tidewater Midstream

Pay attention - limited upside

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

Pair Corralation between NuStar Energy and Tidewater Midstream

If you would invest  9.01  in Tidewater Midstream and on December 1, 2024 and sell it today you would earn a total of  4.99  from holding Tidewater Midstream and or generate 55.38% 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.  Tidewater Midstream and

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.

Tidewater Midstream and

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tidewater Midstream and are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward indicators, Tidewater Midstream reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NuStar Energy and Tidewater Midstream

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

The idea behind NuStar Energy LP and Tidewater Midstream and 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.