Correlation Between Altagas Cum and PHX Energy
Can any of the company-specific risk be diversified away by investing in both Altagas Cum and PHX 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 Altagas Cum and PHX Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Altagas Cum Red and PHX Energy Services, you can compare the effects of market volatilities on Altagas Cum and PHX 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 Altagas Cum with a short position of PHX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Altagas Cum and PHX Energy.
Diversification Opportunities for Altagas Cum and PHX Energy
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Altagas and PHX is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Altagas Cum Red and PHX Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHX Energy Services and Altagas Cum 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 Altagas Cum Red are associated (or correlated) with PHX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHX Energy Services has no effect on the direction of Altagas Cum i.e., Altagas Cum and PHX Energy go up and down completely randomly.
Pair Corralation between Altagas Cum and PHX Energy
Assuming the 90 days trading horizon Altagas Cum Red is expected to generate 0.37 times more return on investment than PHX Energy. However, Altagas Cum Red is 2.71 times less risky than PHX Energy. It trades about 0.31 of its potential returns per unit of risk. PHX Energy Services is currently generating about 0.1 per unit of risk. If you would invest 1,845 in Altagas Cum Red on August 30, 2024 and sell it today you would earn a total of 102.00 from holding Altagas Cum Red or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Altagas Cum Red vs. PHX Energy Services
Performance |
| Timeline |
| Altagas Cum Red |
| PHX Energy Services |
Altagas Cum and PHX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Altagas Cum and PHX Energy
The main advantage of trading using opposite Altagas Cum and PHX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Altagas Cum position performs unexpectedly, PHX 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 PHX Energy will offset losses from the drop in PHX Energy's long position.| Altagas Cum vs. Wilmington Capital Management | Altagas Cum vs. Element Fleet Management | Altagas Cum vs. Economic Investment Trust | Altagas Cum vs. Altair Resources |
| PHX Energy vs. CES Energy Solutions | PHX Energy vs. Total Energy Services | PHX Energy vs. Western Energy Services |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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