Correlation Between Natural Gas and Sidi Kerir
Can any of the company-specific risk be diversified away by investing in both Natural Gas and Sidi Kerir 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 Sidi Kerir 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 Sidi Kerir Petrochemicals, you can compare the effects of market volatilities on Natural Gas and Sidi Kerir 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 Sidi Kerir. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Gas and Sidi Kerir.
Diversification Opportunities for Natural Gas and Sidi Kerir
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Natural and Sidi is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Natural Gas Mining and Sidi Kerir Petrochemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sidi Kerir Petrochemicals 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 Sidi Kerir. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sidi Kerir Petrochemicals has no effect on the direction of Natural Gas i.e., Natural Gas and Sidi Kerir go up and down completely randomly.
Pair Corralation between Natural Gas and Sidi Kerir
Assuming the 90 days trading horizon Natural Gas Mining is expected to generate 1.3 times more return on investment than Sidi Kerir. However, Natural Gas is 1.3 times more volatile than Sidi Kerir Petrochemicals. It trades about 0.04 of its potential returns per unit of risk. Sidi Kerir Petrochemicals is currently generating about 0.03 per unit of risk. If you would invest 3,172 in Natural Gas Mining on December 16, 2024 and sell it today you would earn a total of 866.00 from holding Natural Gas Mining or generate 27.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Natural Gas Mining vs. Sidi Kerir Petrochemicals
Performance |
| Timeline |
| Natural Gas Mining |
| Sidi Kerir Petrochemicals |
Natural Gas and Sidi Kerir Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Gas and Sidi Kerir
The main advantage of trading using opposite Natural Gas and Sidi Kerir positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Gas position performs unexpectedly, Sidi Kerir 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 Sidi Kerir will offset losses from the drop in Sidi Kerir's long position.| Natural Gas vs. AJWA for Food | ||
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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