Correlation Between Enagas SA and Ageas SANV
Can any of the company-specific risk be diversified away by investing in both Enagas SA and Ageas SANV 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 Enagas SA and Ageas SANV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enagas SA and ageas SANV, you can compare the effects of market volatilities on Enagas SA and Ageas SANV 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 Enagas SA with a short position of Ageas SANV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enagas SA and Ageas SANV.
Diversification Opportunities for Enagas SA and Ageas SANV
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enagas and Ageas is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Enagas SA and ageas SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ageas SANV and Enagas 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 Enagas SA are associated (or correlated) with Ageas SANV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ageas SANV has no effect on the direction of Enagas SA i.e., Enagas SA and Ageas SANV go up and down completely randomly.
Pair Corralation between Enagas SA and Ageas SANV
Assuming the 90 days horizon Enagas SA is expected to under-perform the Ageas SANV. In addition to that, Enagas SA is 1.51 times more volatile than ageas SANV. It trades about -0.12 of its total potential returns per unit of risk. ageas SANV is currently generating about -0.17 per unit of volatility. If you would invest 5,174 in ageas SANV on September 19, 2024 and sell it today you would lose (208.00) from holding ageas SANV or give up 4.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Enagas SA vs. ageas SANV
Performance |
| Timeline |
| Enagas SA |
| ageas SANV |
Enagas SA and Ageas SANV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enagas SA and Ageas SANV
The main advantage of trading using opposite Enagas SA and Ageas SANV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enagas SA position performs unexpectedly, Ageas SANV 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 Ageas SANV will offset losses from the drop in Ageas SANV's long position.| Enagas SA vs. Northwest Natural Gas | Enagas SA vs. Chesapeake Utilities | Enagas SA vs. One Gas | Enagas SA vs. NiSource |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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