Correlation Between Naturgy Energy and Beijing Gas
Can any of the company-specific risk be diversified away by investing in both Naturgy Energy and Beijing Gas 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 Naturgy Energy and Beijing Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naturgy Energy Group and Beijing Gas Blue, you can compare the effects of market volatilities on Naturgy Energy and Beijing Gas 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 Naturgy Energy with a short position of Beijing Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naturgy Energy and Beijing Gas.
Diversification Opportunities for Naturgy Energy and Beijing Gas
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Naturgy and Beijing is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Naturgy Energy Group and Beijing Gas Blue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beijing Gas Blue and Naturgy Energy 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 Naturgy Energy Group are associated (or correlated) with Beijing Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beijing Gas Blue has no effect on the direction of Naturgy Energy i.e., Naturgy Energy and Beijing Gas go up and down completely randomly.
Pair Corralation between Naturgy Energy and Beijing Gas
Assuming the 90 days horizon Naturgy Energy Group is expected to generate 0.08 times more return on investment than Beijing Gas. However, Naturgy Energy Group is 12.49 times less risky than Beijing Gas. It trades about -0.11 of its potential returns per unit of risk. Beijing Gas Blue is currently generating about -0.22 per unit of risk. If you would invest 493.00 in Naturgy Energy Group on August 28, 2024 and sell it today you would lose (18.00) from holding Naturgy Energy Group or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naturgy Energy Group vs. Beijing Gas Blue
Performance |
| Timeline |
| Naturgy Energy Group |
| Beijing Gas Blue |
Naturgy Energy and Beijing Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naturgy Energy and Beijing Gas
The main advantage of trading using opposite Naturgy Energy and Beijing Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naturgy Energy position performs unexpectedly, Beijing Gas 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 Beijing Gas will offset losses from the drop in Beijing Gas' long position.| Naturgy Energy vs. Hong Kong and | Naturgy Energy vs. NewJersey Resources | Naturgy Energy vs. Atmos Energy | Naturgy Energy vs. Brookfield Infrastructure Corp |
| Beijing Gas vs. ENN Energy Holdings | Beijing Gas vs. EverGen Infrastructure Corp | Beijing Gas vs. OPAL Fuels | Beijing Gas vs. Atmos 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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