Correlation Between Bengal Energy and CGX Energy
Can any of the company-specific risk be diversified away by investing in both Bengal Energy and CGX 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 Bengal Energy and CGX Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bengal Energy and CGX Energy, you can compare the effects of market volatilities on Bengal Energy and CGX 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 Bengal Energy with a short position of CGX Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bengal Energy and CGX Energy.
Diversification Opportunities for Bengal Energy and CGX Energy
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bengal and CGX is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Bengal Energy and CGX Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGX Energy and Bengal Energy 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 Bengal Energy are associated (or correlated) with CGX Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGX Energy has no effect on the direction of Bengal Energy i.e., Bengal Energy and CGX Energy go up and down completely randomly.
Pair Corralation between Bengal Energy and CGX Energy
Assuming the 90 days horizon Bengal Energy is expected to under-perform the CGX Energy. In addition to that, Bengal Energy is 1.38 times more volatile than CGX Energy. It trades about -0.03 of its total potential returns per unit of risk. CGX Energy is currently generating about 0.1 per unit of volatility. If you would invest 10.00 in CGX Energy on November 3, 2024 and sell it today you would earn a total of 1.00 from holding CGX Energy or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Bengal Energy vs. CGX Energy
Performance |
| Timeline |
| Bengal Energy |
| CGX Energy |
Bengal Energy and CGX Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bengal Energy and CGX Energy
The main advantage of trading using opposite Bengal Energy and CGX Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bengal Energy position performs unexpectedly, CGX 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 CGX Energy will offset losses from the drop in CGX Energy's long position.| Bengal Energy vs. Agnico Eagle Mines | Bengal Energy vs. Osisko Gold Ro | Bengal Energy vs. Gold Fields Ltd | Bengal Energy vs. AngloGold Ashanti plc |
| CGX Energy vs. Avanti Energy | CGX Energy vs. Desert Mountain Energy | CGX Energy vs. Royal Helium | CGX Energy vs. Eco Oil Gas |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |