Correlation Between Calumet Specialty and Brooge Holdings

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

By analyzing existing cross correlation between Calumet Specialty Products and Brooge Holdings, you can compare the effects of market volatilities on Calumet Specialty and Brooge Holdings 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 Calumet Specialty with a short position of Brooge Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calumet Specialty and Brooge Holdings.

Diversification Opportunities for Calumet Specialty and Brooge Holdings

0.66

Correlation Coefficient

Calumet Specialty  Brooge Holdings

Poor diversification

The 3 months correlation between Calumet and Brooge is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Calumet Specialty Products and Brooge Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brooge Holdings and Calumet Specialty 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 Calumet Specialty Products are associated (or correlated) with Brooge Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brooge Holdings has no effect on the direction of Calumet Specialty i.e., Calumet Specialty and Brooge Holdings go up and down completely randomly.

Pair Corralation between Calumet Specialty and Brooge Holdings

Given the investment horizon of 90 days Calumet Specialty is expected to generate 3.59 times less return on investment than Brooge Holdings. But when comparing it to its historical volatility, Calumet Specialty Products is 4.53 times less risky than Brooge Holdings. It trades about 0.21 of its potential returns per unit of risk. Brooge Holdings is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  127.00  in Brooge Holdings on May 3, 2025 and sell it today you would earn a total of  142.00  from holding Brooge Holdings or generate 111.81% return on investment over 90 days.

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

Calumet Specialty Products  vs.  Brooge Holdings

Calumet Specialty

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Calumet Specialty Products are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak primary indicators, Calumet Specialty unveiled solid returns over the last few months and may actually be approaching a breakup point.

Brooge Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brooge Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Brooge Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Calumet Specialty and Brooge Holdings

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

The idea behind Calumet Specialty Products and Brooge Holdings 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .