Correlation Between MPLX LP and Enterprise Products

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

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

Diversification Opportunities for MPLX LP and Enterprise Products

0.38

Correlation Coefficient

MPLX LP  Enterprise Products

Weak diversification

The 3 months correlation between MPLX and Enterprise is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding MPLX LP and Enterprise Products Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enterprise Products and MPLX LP 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 MPLX LP are associated (or correlated) with Enterprise Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enterprise Products has no effect on the direction of MPLX LP i.e., MPLX LP and Enterprise Products go up and down completely randomly.

Pair Corralation between MPLX LP and Enterprise Products

Given the investment horizon of 90 days MPLX LP is expected to generate 18.33 times less return on investment than Enterprise Products. In addition to that, MPLX LP is 1.4 times more volatile than Enterprise Products Partners. It trades about 0.0 of its total potential returns per unit of risk. Enterprise Products Partners is currently generating about 0.03 per unit of volatility. If you would invest  3,077  in Enterprise Products Partners on July 4, 2025 and sell it today you would earn a total of  38.00  from holding Enterprise Products Partners or generate 1.23% return on investment over 90 days.

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

MPLX LP  vs.  Enterprise Products Partners

MPLX LP

Risk-Adjusted Performance

Weakest

Over the last 90 days MPLX LP has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong essential indicators, MPLX LP is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Enterprise Products

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Enterprise Products Partners are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Enterprise Products is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MPLX LP and Enterprise Products

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

The idea behind MPLX LP and Enterprise Products Partners 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.