Correlation Between Dynagas LNG and Plains All

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

By analyzing existing cross correlation between Dynagas LNG Partners and Plains All American, you can compare the effects of market volatilities on Dynagas LNG and Plains All 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 Dynagas LNG with a short position of Plains All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dynagas LNG and Plains All.

Diversification Opportunities for Dynagas LNG and Plains All

-0.04

Correlation Coefficient

Dynagas LNG  Plains All

Good diversification

The 3 months correlation between Dynagas and Plains is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dynagas LNG Partners and Plains All American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plains All American and Dynagas LNG 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 Dynagas LNG Partners are associated (or correlated) with Plains All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plains All American has no effect on the direction of Dynagas LNG i.e., Dynagas LNG and Plains All go up and down completely randomly.

Pair Corralation between Dynagas LNG and Plains All

Given the investment horizon of 90 days Dynagas LNG is expected to generate 3.35 times less return on investment than Plains All. In addition to that, Dynagas LNG is 1.46 times more volatile than Plains All American. It trades about 0.03 of its total potential returns per unit of risk. Plains All American is currently generating about 0.15 per unit of volatility. If you would invest  1,590  in Plains All American on May 6, 2025 and sell it today you would earn a total of  210.00  from holding Plains All American or generate 13.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

Dynagas LNG Partners  vs.  Plains All American

Dynagas LNG Partners

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Dynagas LNG Partners are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Dynagas LNG is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Plains All American

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Plains All American are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Plains All sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dynagas LNG and Plains All

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

The idea behind Dynagas LNG Partners and Plains All American 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.