Correlation Between Suntory Beverage and Naturgy Energy
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage and Naturgy 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 Suntory Beverage and Naturgy Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and Naturgy Energy Group, you can compare the effects of market volatilities on Suntory Beverage and Naturgy 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 Suntory Beverage with a short position of Naturgy Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and Naturgy Energy.
Diversification Opportunities for Suntory Beverage and Naturgy Energy
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Suntory and Naturgy is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and Naturgy Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturgy Energy Group and Suntory Beverage 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 Suntory Beverage Food are associated (or correlated) with Naturgy Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturgy Energy Group has no effect on the direction of Suntory Beverage i.e., Suntory Beverage and Naturgy Energy go up and down completely randomly.
Pair Corralation between Suntory Beverage and Naturgy Energy
Assuming the 90 days horizon Suntory Beverage is expected to generate 5.14 times less return on investment than Naturgy Energy. In addition to that, Suntory Beverage is 1.08 times more volatile than Naturgy Energy Group. It trades about 0.0 of its total potential returns per unit of risk. Naturgy Energy Group is currently generating about 0.01 per unit of volatility. If you would invest 2,211 in Naturgy Energy Group on September 16, 2024 and sell it today you would earn a total of 85.00 from holding Naturgy Energy Group or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. Naturgy Energy Group
Performance |
| Timeline |
| Suntory Beverage Food |
| Naturgy Energy Group |
Suntory Beverage and Naturgy Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and Naturgy Energy
The main advantage of trading using opposite Suntory Beverage and Naturgy Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage position performs unexpectedly, Naturgy 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 Naturgy Energy will offset losses from the drop in Naturgy Energy's long position.| Suntory Beverage vs. Superior Plus Corp | Suntory Beverage vs. SIVERS SEMICONDUCTORS AB | Suntory Beverage vs. NorAm Drilling AS | Suntory Beverage vs. Norsk Hydro ASA |
| Naturgy Energy vs. CenterPoint Energy | Naturgy Energy vs. Snam SpA | Naturgy Energy vs. ENN Energy Holdings | Naturgy Energy vs. ENN Energy Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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