Correlation Between Oil Gas and Adams Natural
Can any of the company-specific risk be diversified away by investing in both Oil Gas and Adams Natural 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 Oil Gas and Adams Natural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oil Gas Ultrasector and Adams Natural Resources, you can compare the effects of market volatilities on Oil Gas and Adams Natural 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 Oil Gas with a short position of Adams Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Adams Natural.
Diversification Opportunities for Oil Gas and Adams Natural
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Oil and Adams is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Adams Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adams Natural Resources and Oil 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 Oil Gas Ultrasector are associated (or correlated) with Adams Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adams Natural Resources has no effect on the direction of Oil Gas i.e., Oil Gas and Adams Natural go up and down completely randomly.
Pair Corralation between Oil Gas and Adams Natural
Assuming the 90 days horizon Oil Gas is expected to generate 1.19 times less return on investment than Adams Natural. In addition to that, Oil Gas is 1.65 times more volatile than Adams Natural Resources. It trades about 0.02 of its total potential returns per unit of risk. Adams Natural Resources is currently generating about 0.05 per unit of volatility. If you would invest 1,874 in Adams Natural Resources on August 27, 2024 and sell it today you would earn a total of 515.00 from holding Adams Natural Resources or generate 27.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oil Gas Ultrasector vs. Adams Natural Resources
Performance |
| Timeline |
| Oil Gas Ultrasector |
| Adams Natural Resources |
Oil Gas and Adams Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oil Gas and Adams Natural
The main advantage of trading using opposite Oil Gas and Adams Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oil Gas position performs unexpectedly, Adams Natural 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 Adams Natural will offset losses from the drop in Adams Natural's long position.| Oil Gas vs. Oil Gas Ultrasector | Oil Gas vs. Ultramid Cap Profund Ultramid Cap | Oil Gas vs. Precious Metals Ultrasector | Oil Gas vs. Real Estate Ultrasector |
| Adams Natural vs. Liberty All Star | Adams Natural vs. Tri Continental Closed | Adams Natural vs. Royce Value Closed | Adams Natural vs. Central Securities |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |