Correlation Between Summit Midstream and MPLX LP

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

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

Diversification Opportunities for Summit Midstream and MPLX LP

0.13

Correlation Coefficient

Summit Midstream  MPLX LP

Average diversification

The 3 months correlation between Summit and MPLX is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Summit Midstream and MPLX LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MPLX LP and Summit Midstream 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 Summit Midstream are associated (or correlated) with MPLX LP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MPLX LP has no effect on the direction of Summit Midstream i.e., Summit Midstream and MPLX LP go up and down completely randomly.

Pair Corralation between Summit Midstream and MPLX LP

Considering the 90-day investment horizon Summit Midstream is expected to under-perform the MPLX LP. In addition to that, Summit Midstream is 4.19 times more volatile than MPLX LP. It trades about -0.02 of its total potential returns per unit of risk. MPLX LP is currently generating about 0.04 per unit of volatility. If you would invest  5,008  in MPLX LP on June 4, 2025 and sell it today you would earn a total of  94.00  from holding MPLX LP or generate 1.88% return on investment over 90 days.

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

Summit Midstream  vs.  MPLX LP

Summit Midstream

Risk-Adjusted Performance

Weakest

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

MPLX LP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MPLX LP are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Summit Midstream and MPLX LP

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

The idea behind Summit Midstream and MPLX 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.