Correlation Between Natural Gas and Speed Medical
Can any of the company-specific risk be diversified away by investing in both Natural Gas and Speed Medical 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 Speed Medical 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 Speed Medical, you can compare the effects of market volatilities on Natural Gas and Speed Medical 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 Speed Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Gas and Speed Medical.
Diversification Opportunities for Natural Gas and Speed Medical
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Natural and Speed is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Natural Gas Mining and Speed Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Speed Medical 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 Speed Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Speed Medical has no effect on the direction of Natural Gas i.e., Natural Gas and Speed Medical go up and down completely randomly.
Pair Corralation between Natural Gas and Speed Medical
Assuming the 90 days trading horizon Natural Gas Mining is expected to under-perform the Speed Medical. But the stock apears to be less risky and, when comparing its historical volatility, Natural Gas Mining is 2.74 times less risky than Speed Medical. The stock trades about -0.03 of its potential returns per unit of risk. The Speed Medical is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 36.00 in Speed Medical on November 4, 2024 and sell it today you would earn a total of 5.00 from holding Speed Medical or generate 13.89% 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. Speed Medical
Performance |
| Timeline |
| Natural Gas Mining |
| Speed Medical |
Natural Gas and Speed Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Gas and Speed Medical
The main advantage of trading using opposite Natural Gas and Speed Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Gas position performs unexpectedly, Speed Medical 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 Speed Medical will offset losses from the drop in Speed Medical's long position.| Natural Gas vs. Odin for Investment | Natural Gas vs. Egypt Aluminum | Natural Gas vs. Nile City Investment | Natural Gas vs. Cairo For Investment |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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