Correlation Between Natural Gas and Reacap Financial
Can any of the company-specific risk be diversified away by investing in both Natural Gas and Reacap Financial 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 Reacap Financial 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 Reacap Financial Investments, you can compare the effects of market volatilities on Natural Gas and Reacap Financial 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 Reacap Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Gas and Reacap Financial.
Diversification Opportunities for Natural Gas and Reacap Financial
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Natural and Reacap is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Natural Gas Mining and Reacap Financial Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reacap Financial Inv 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 Reacap Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reacap Financial Inv has no effect on the direction of Natural Gas i.e., Natural Gas and Reacap Financial go up and down completely randomly.
Pair Corralation between Natural Gas and Reacap Financial
Assuming the 90 days trading horizon Natural Gas Mining is expected to generate 1.11 times more return on investment than Reacap Financial. However, Natural Gas is 1.11 times more volatile than Reacap Financial Investments. It trades about -0.03 of its potential returns per unit of risk. Reacap Financial Investments is currently generating about -0.08 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Gas Mining vs. Reacap Financial Investments
Performance |
| Timeline |
| Natural Gas Mining |
| Reacap Financial Inv |
Natural Gas and Reacap Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Gas and Reacap Financial
The main advantage of trading using opposite Natural Gas and Reacap Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Gas position performs unexpectedly, Reacap Financial 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 Reacap Financial will offset losses from the drop in Reacap Financial'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 |
| Reacap Financial vs. Pyramisa Hotels | Reacap Financial vs. Misr Hotels | Reacap Financial vs. Credit Agricole Egypt | Reacap Financial vs. Misr Financial Investments |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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