Correlation Between Enterprise Products and Generation Essentials

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

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

Diversification Opportunities for Enterprise Products and Generation Essentials

-0.44

Correlation Coefficient

Enterprise Products  Generation Essentials

Very good diversification

The 3 months correlation between Enterprise and Generation is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Enterprise Products Partners and The Generation Essentials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Generation Essentials and Enterprise Products 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 Enterprise Products Partners are associated (or correlated) with Generation Essentials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Generation Essentials has no effect on the direction of Enterprise Products i.e., Enterprise Products and Generation Essentials go up and down completely randomly.

Pair Corralation between Enterprise Products and Generation Essentials

Considering the 90-day investment horizon Enterprise Products Partners is expected to generate 0.2 times more return on investment than Generation Essentials. However, Enterprise Products Partners is 4.93 times less risky than Generation Essentials. It trades about 0.08 of its potential returns per unit of risk. The Generation Essentials is currently generating about -0.27 per unit of risk. If you would invest  3,175  in Enterprise Products Partners on September 16, 2025 and sell it today you would earn a total of  38.00  from holding Enterprise Products Partners or generate 1.2% return on investment over 90 days.

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

Enterprise Products Partners  vs.  The Generation Essentials

Enterprise Products

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Enterprise Products Partners are ranked lower than 4 (%) 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.

The Generation Essentials

Risk-Adjusted Performance

Weakest

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

Pair Trading with Enterprise Products and Generation Essentials

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

The idea behind Enterprise Products Partners and The Generation Essentials 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.