Correlation Between Tidewater Midstream and AltaGas

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

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

Diversification Opportunities for Tidewater Midstream and AltaGas

0.56

Correlation Coefficient

Tidewater Midstream  AltaGas

Very weak diversification

The 3 months correlation between Tidewater and AltaGas is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Tidewater Midstream and and AltaGas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AltaGas and Tidewater 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 Tidewater Midstream and are associated (or correlated) with AltaGas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AltaGas has no effect on the direction of Tidewater Midstream i.e., Tidewater Midstream and AltaGas go up and down completely randomly.

Pair Corralation between Tidewater Midstream and AltaGas

Assuming the 90 days trading horizon Tidewater Midstream and is expected to under-perform the AltaGas. In addition to that, Tidewater Midstream is 5.04 times more volatile than AltaGas. It trades about -0.03 of its total potential returns per unit of risk. AltaGas is currently generating about 0.03 per unit of volatility. If you would invest  3,960  in AltaGas on April 24, 2025 and sell it today you would earn a total of  57.00  from holding AltaGas or generate 1.44% return on investment over 90 days.

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

Tidewater Midstream and  vs.  AltaGas

Tidewater Midstream and

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tidewater Midstream and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's primary indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

AltaGas

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AltaGas are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, AltaGas is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Tidewater Midstream and AltaGas

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

The idea behind Tidewater Midstream and and AltaGas 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 Global Correlations module to find global opportunities by holding instruments from different markets.