Correlation Between EnLink Midstream and Marcus

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

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

Diversification Opportunities for EnLink Midstream and Marcus

-0.22

Correlation Coefficient

EnLink Midstream  Marcus

Very good diversification

The 3 months correlation between EnLink and Marcus is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding EnLink Midstream LLC and Marcus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus and EnLink Midstream 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 EnLink Midstream LLC are associated (or correlated) with Marcus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus has no effect on the direction of EnLink Midstream i.e., EnLink Midstream and Marcus go up and down completely randomly.

Pair Corralation between EnLink Midstream and Marcus

Given the investment horizon of 90 days EnLink Midstream LLC is expected to generate 0.62 times more return on investment than Marcus. However, EnLink Midstream LLC is 1.61 times less risky than Marcus. It trades about 0.2 of its potential returns per unit of risk. Marcus is currently generating about -0.09 per unit of risk. If you would invest  1,333  in EnLink Midstream LLC on January 26, 2024 and sell it today you would earn a total of  45.00  from holding EnLink Midstream LLC or generate 3.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

EnLink Midstream LLC  vs.  Marcus

EnLink Midstream LLC

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EnLink Midstream LLC are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, EnLink Midstream may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Marcus

Risk-Adjusted Performance

0 of 100

Weak

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

Pair Trading with EnLink Midstream and Marcus

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

The idea behind EnLink Midstream LLC and Marcus 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.