Correlation Between NGL Energy and NGL Energy

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

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

Diversification Opportunities for NGL Energy and NGL Energy

0.79

Correlation Coefficient

NGL Energy  NGL Energy

Poor diversification

The 3 months correlation between NGL and NGL is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding NGL Energy Partners and NGL Energy Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NGL Energy Partners and NGL 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 NGL Energy Partners are associated (or correlated) with NGL Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NGL Energy Partners has no effect on the direction of NGL Energy i.e., NGL Energy and NGL Energy go up and down completely randomly.

Pair Corralation between NGL Energy and NGL Energy

Assuming the 90 days trading horizon NGL Energy Partners is expected to generate 0.41 times more return on investment than NGL Energy. However, NGL Energy Partners is 2.46 times less risky than NGL Energy. It trades about -0.08 of its potential returns per unit of risk. NGL Energy Partners is currently generating about -0.08 per unit of risk. If you would invest  2,318  in NGL Energy Partners on February 27, 2025 and sell it today you would lose (219.00) from holding NGL Energy Partners or give up 9.45% of portfolio value over 90 days.

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

NGL Energy Partners  vs.  NGL Energy Partners

NGL Energy Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days NGL Energy Partners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Preferred Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

NGL Energy Partners

Risk-Adjusted Performance

Very Weak

Over the last 90 days NGL Energy Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in June 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with NGL Energy and NGL Energy

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

The idea behind NGL Energy Partners and NGL Energy 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.