Correlation Between Excelerate Energy and Sunoco LP

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

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

Diversification Opportunities for Excelerate Energy and Sunoco LP

-0.28

Correlation Coefficient

Excelerate Energy  Sunoco LP

Very good diversification

The 3 months correlation between Excelerate and Sunoco is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Excelerate Energy and Sunoco LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunoco LP and Excelerate 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 Excelerate Energy are associated (or correlated) with Sunoco LP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunoco LP has no effect on the direction of Excelerate Energy i.e., Excelerate Energy and Sunoco LP go up and down completely randomly.

Pair Corralation between Excelerate Energy and Sunoco LP

Allowing for the 90-day total investment horizon Excelerate Energy is expected to generate 1.32 times more return on investment than Sunoco LP. However, Excelerate Energy is 1.32 times more volatile than Sunoco LP. It trades about -0.02 of its potential returns per unit of risk. Sunoco LP is currently generating about -0.08 per unit of risk. If you would invest  2,649  in Excelerate Energy on April 24, 2025 and sell it today you would lose (112.00) from holding Excelerate Energy or give up 4.23% of portfolio value over 90 days.

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

Excelerate Energy  vs.  Sunoco LP

Excelerate Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Excelerate Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Excelerate Energy is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Sunoco LP

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunoco LP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Excelerate Energy and Sunoco LP

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

The idea behind Excelerate Energy and Sunoco LP 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.