Correlation Between AJWA For and Natural Gas
Can any of the company-specific risk be diversified away by investing in both AJWA For and Natural Gas 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 AJWA For and Natural Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AJWA for Food and Natural Gas Mining, you can compare the effects of market volatilities on AJWA For and Natural Gas 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 AJWA For with a short position of Natural Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of AJWA For and Natural Gas.
Diversification Opportunities for AJWA For and Natural Gas
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AJWA and Natural is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding AJWA for Food and Natural Gas Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Gas Mining and AJWA For 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 AJWA for Food are associated (or correlated) with Natural Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Gas Mining has no effect on the direction of AJWA For i.e., AJWA For and Natural Gas go up and down completely randomly.
Pair Corralation between AJWA For and Natural Gas
Assuming the 90 days trading horizon AJWA for Food is expected to under-perform the Natural Gas. In addition to that, AJWA For is 3.03 times more volatile than Natural Gas Mining. It trades about -0.04 of its total potential returns per unit of risk. Natural Gas Mining is currently generating about -0.06 per unit of volatility. If you would invest 4,088 in Natural Gas Mining on December 16, 2024 and sell it today you would lose (50.00) from holding Natural Gas Mining or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AJWA for Food vs. Natural Gas Mining
Performance |
| Timeline |
| AJWA for Food |
| Natural Gas Mining |
AJWA For and Natural Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AJWA For and Natural Gas
The main advantage of trading using opposite AJWA For and Natural Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AJWA For position performs unexpectedly, Natural Gas 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 Natural Gas will offset losses from the drop in Natural Gas' long position.| AJWA For vs. Assiut Islamic Trading | ||
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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