Correlation Between NGL Energy and Legend Oil

Can any of the company-specific risk be diversified away by investing in both NGL Energy and Legend Oil 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 Legend Oil 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 Legend Oil Gas, you can compare the effects of market volatilities on NGL Energy and Legend Oil 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 Legend Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of NGL Energy and Legend Oil.

Diversification Opportunities for NGL Energy and Legend Oil

0.0

Correlation Coefficient

NGL Energy  Legend Oil

Pay attention - limited upside

The 3 months correlation between NGL and Legend is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NGL Energy Partners and Legend Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legend Oil Gas 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 Legend Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legend Oil Gas has no effect on the direction of NGL Energy i.e., NGL Energy and Legend Oil go up and down completely randomly.

Pair Corralation between NGL Energy and Legend Oil

If you would invest  298.00  in NGL Energy Partners on May 2, 2025 and sell it today you would earn a total of  126.00  from holding NGL Energy Partners or generate 42.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

NGL Energy Partners  vs.  Legend Oil Gas

NGL Energy Partners

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NGL Energy Partners are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting technical and fundamental indicators, NGL Energy disclosed solid returns over the last few months and may actually be approaching a breakup point.

Legend Oil Gas

Risk-Adjusted Performance

Very Weak

Over the last 90 days Legend Oil Gas has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Legend Oil is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with NGL Energy and Legend Oil

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

The idea behind NGL Energy Partners and Legend Oil Gas 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.