Correlation Between Sabine Royalty and GasLog Partners

Can any of the company-specific risk be diversified away by investing in both Sabine Royalty and GasLog Partners 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 Sabine Royalty and GasLog Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Sabine Royalty and GasLog Partners

0.6

Correlation Coefficient

Sabine Royalty  GasLog Partners

Poor diversification

The 3 months correlation between Sabine and GasLog is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sabine Royalty Trust and GasLog Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GasLog Partners LP and Sabine Royalty 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 Sabine Royalty Trust are associated (or correlated) with GasLog Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GasLog Partners LP has no effect on the direction of Sabine Royalty i.e., Sabine Royalty and GasLog Partners go up and down completely randomly.

Pair Corralation between Sabine Royalty and GasLog Partners

Considering the 90-day investment horizon Sabine Royalty Trust is expected to generate 3.6 times more return on investment than GasLog Partners. However, Sabine Royalty is 3.6 times more volatile than GasLog Partners LP. It trades about 0.05 of its potential returns per unit of risk. GasLog Partners LP is currently generating about 0.17 per unit of risk. If you would invest  6,282  in Sabine Royalty Trust on September 27, 2024 and sell it today you would earn a total of  117.00  from holding Sabine Royalty Trust or generate 1.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.91%
Values	Daily Returns

Sabine Royalty Trust  vs.  GasLog Partners LP

Sabine Royalty Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sabine Royalty Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental drivers, Sabine Royalty is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

GasLog Partners LP

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GasLog Partners LP are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, GasLog Partners is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sabine Royalty and GasLog Partners

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

The idea behind Sabine Royalty Trust and GasLog Partners LP 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.