Correlation Between Natural Gas and Qatar Natl
Can any of the company-specific risk be diversified away by investing in both Natural Gas and Qatar Natl 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 Natural Gas and Qatar Natl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Gas Mining and Qatar Natl Bank, you can compare the effects of market volatilities on Natural Gas and Qatar Natl 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 Natural Gas with a short position of Qatar Natl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Gas and Qatar Natl.
Diversification Opportunities for Natural Gas and Qatar Natl
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Natural and Qatar is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Natural Gas Mining and Qatar Natl Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qatar Natl Bank and Natural Gas 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 Natural Gas Mining are associated (or correlated) with Qatar Natl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qatar Natl Bank has no effect on the direction of Natural Gas i.e., Natural Gas and Qatar Natl go up and down completely randomly.
Pair Corralation between Natural Gas and Qatar Natl
Assuming the 90 days trading horizon Natural Gas Mining is expected to generate 2.19 times more return on investment than Qatar Natl. However, Natural Gas is 2.19 times more volatile than Qatar Natl Bank. It trades about -0.03 of its potential returns per unit of risk. Qatar Natl Bank is currently generating about -0.73 per unit of risk. If you would invest 4,205 in Natural Gas Mining on November 5, 2024 and sell it today you would lose (47.00) from holding Natural Gas Mining or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Gas Mining vs. Qatar Natl Bank
Performance |
| Timeline |
| Natural Gas Mining |
| Qatar Natl Bank |
Natural Gas and Qatar Natl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Gas and Qatar Natl
The main advantage of trading using opposite Natural Gas and Qatar Natl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Gas position performs unexpectedly, Qatar Natl 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 Qatar Natl will offset losses from the drop in Qatar Natl's long position.| Natural Gas vs. Egyptian Media Production | Natural Gas vs. B Investments Holding | Natural Gas vs. Alexandria New Medical | Natural Gas vs. Grand Investment Capital |
| Qatar Natl vs. Mohandes Insurance | Qatar Natl vs. Credit Agricole Egypt | Qatar Natl vs. Edita Food Industries | Qatar Natl vs. Faisal Islamic Bank |
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.
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