Correlation Between Cheniere Energy and Baker Hughes
Can any of the company-specific risk be diversified away by investing in both Cheniere Energy and Baker Hughes 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 Cheniere Energy and Baker Hughes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cheniere Energy Partners and Baker Hughes, you can compare the effects of market volatilities on Cheniere Energy and Baker Hughes 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 Cheniere Energy with a short position of Baker Hughes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheniere Energy and Baker Hughes.
Diversification Opportunities for Cheniere Energy and Baker Hughes
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cheniere and Baker is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cheniere Energy Partners and Baker Hughes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baker Hughes and Cheniere 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 Cheniere Energy Partners are associated (or correlated) with Baker Hughes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baker Hughes has no effect on the direction of Cheniere Energy i.e., Cheniere Energy and Baker Hughes go up and down completely randomly.
Pair Corralation between Cheniere Energy and Baker Hughes
If you would invest (100.00) in Baker Hughes on January 20, 2024 and sell it today you would earn a total of 100.00 from holding Baker Hughes 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 |
Cheniere Energy Partners vs. Baker Hughes
Performance |
Timeline |
Cheniere Energy Partners |
Baker Hughes |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Cheniere Energy and Baker Hughes Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cheniere Energy and Baker Hughes
The main advantage of trading using opposite Cheniere Energy and Baker Hughes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheniere Energy position performs unexpectedly, Baker Hughes 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 Baker Hughes will offset losses from the drop in Baker Hughes' long position.Cheniere Energy vs. Plains All American | Cheniere Energy vs. NuStar Energy LP | Cheniere Energy vs. Genesis Energy LP | Cheniere Energy vs. Western Midstream Partners |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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