Correlation Between Enagás SA and UGI Corp
Can any of the company-specific risk be diversified away by investing in both Enagás SA and UGI Corp 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 Enagás SA and UGI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enags SA and UGI Corp Unit, you can compare the effects of market volatilities on Enagás SA and UGI Corp 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 Enagás SA with a short position of UGI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enagás SA and UGI Corp.
Diversification Opportunities for Enagás SA and UGI Corp
Weak diversification
The 3 months correlation between Enagás and UGI is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Enags SA and UGI Corp Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UGI Corp Unit and Enagás SA 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 Enags SA are associated (or correlated) with UGI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UGI Corp Unit has no effect on the direction of Enagás SA i.e., Enagás SA and UGI Corp go up and down completely randomly.
Pair Corralation between Enagás SA and UGI Corp
Assuming the 90 days horizon Enags SA is expected to generate 3.18 times more return on investment than UGI Corp. However, Enagás SA is 3.18 times more volatile than UGI Corp Unit. It trades about 0.02 of its potential returns per unit of risk. UGI Corp Unit is currently generating about -0.09 per unit of risk. If you would invest 1,667 in Enags SA on September 3, 2024 and sell it today you would lose (222.00) from holding Enags SA or give up 13.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 36.45% |
| Values | Daily Returns |
Enags SA vs. UGI Corp Unit
Performance |
| Timeline |
| Enagás SA |
| UGI Corp Unit |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Enagás SA and UGI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enagás SA and UGI Corp
The main advantage of trading using opposite Enagás SA and UGI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enagás SA position performs unexpectedly, UGI Corp 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 UGI Corp will offset losses from the drop in UGI Corp's long position.| Enagás SA vs. NewJersey Resources | Enagás SA vs. Atmos Energy | Enagás SA vs. Brookfield Infrastructure Corp | Enagás SA vs. New Fortress Energy |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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