Correlation Between SMLP Old and Imperial Petroleum

Can any of the company-specific risk be diversified away by investing in both SMLP Old and Imperial Petroleum 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 SMLP Old and Imperial Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SMLP Old and Imperial Petroleum, you can compare the effects of market volatilities on SMLP Old and Imperial Petroleum 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 SMLP Old with a short position of Imperial Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of SMLP Old and Imperial Petroleum.

Diversification Opportunities for SMLP Old and Imperial Petroleum

0.0

Correlation Coefficient

SMLP Old  Imperial Petroleum

Pay attention - limited upside

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

Pair Corralation between SMLP Old and Imperial Petroleum

If you would invest (100.00) in SMLP Old on December 20, 2024 and sell it today you would earn a total of  100.00  from holding SMLP Old or generate -100.0% return on investment over 90 days.

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

SMLP Old  vs.  Imperial Petroleum

SMLP Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days SMLP Old has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable essential indicators, SMLP Old is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Imperial Petroleum

Risk-Adjusted Performance

Very Weak

Over the last 90 days Imperial Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with SMLP Old and Imperial Petroleum

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

The idea behind SMLP Old and Imperial Petroleum 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.