Correlation Between Enagas SA and Ageas SA/NV
Can any of the company-specific risk be diversified away by investing in both Enagas SA and Ageas SA/NV 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 SA/NV 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 SA/NV 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 SA/NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enagas SA and Ageas SA/NV.
Diversification Opportunities for Enagas SA and Ageas SA/NV
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enagas and Ageas is 0.69. 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 SA/NV 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 SA/NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ageas SA/NV has no effect on the direction of Enagas SA i.e., Enagas SA and Ageas SA/NV go up and down completely randomly.
Pair Corralation between Enagas SA and Ageas SA/NV
Assuming the 90 days horizon Enagas SA is expected to under-perform the Ageas SA/NV. But the pink sheet apears to be less risky and, when comparing its historical volatility, Enagas SA is 1.07 times less risky than Ageas SA/NV. The pink sheet trades about -0.02 of its potential returns per unit of risk. The ageas SANV is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 4,698 in ageas SANV on November 7, 2024 and sell it today you would earn a total of 465.00 from holding ageas SANV or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enagas SA vs. ageas SANV
Performance |
| Timeline |
| Enagas SA |
| Ageas SA/NV |
Enagas SA and Ageas SA/NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enagas SA and Ageas SA/NV
The main advantage of trading using opposite Enagas SA and Ageas SA/NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enagas SA position performs unexpectedly, Ageas SA/NV 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 SA/NV will offset losses from the drop in Ageas SA/NV'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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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