Correlation Between Ngx Energy and PetroShale
Can any of the company-specific risk be diversified away by investing in both Ngx Energy and PetroShale 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 Ngx Energy and PetroShale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ngx Energy International and PetroShale, you can compare the effects of market volatilities on Ngx Energy and PetroShale 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 Ngx Energy with a short position of PetroShale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ngx Energy and PetroShale.
Diversification Opportunities for Ngx Energy and PetroShale
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Ngx and PetroShale is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Ngx Energy International and PetroShale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroShale and Ngx 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 Ngx Energy International are associated (or correlated) with PetroShale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroShale has no effect on the direction of Ngx Energy i.e., Ngx Energy and PetroShale go up and down completely randomly.
Pair Corralation between Ngx Energy and PetroShale
Assuming the 90 days horizon Ngx Energy International is expected to generate 1.66 times more return on investment than PetroShale. However, Ngx Energy is 1.66 times more volatile than PetroShale. It trades about -0.1 of its potential returns per unit of risk. PetroShale is currently generating about -0.21 per unit of risk. If you would invest 69.00 in Ngx Energy International on August 30, 2024 and sell it today you would lose (4.00) from holding Ngx Energy International or give up 5.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ngx Energy International vs. PetroShale
Performance |
| Timeline |
| Ngx Energy International |
| PetroShale |
Ngx Energy and PetroShale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ngx Energy and PetroShale
The main advantage of trading using opposite Ngx Energy and PetroShale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ngx Energy position performs unexpectedly, PetroShale 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 PetroShale will offset losses from the drop in PetroShale's long position.| Ngx Energy vs. Trillion Energy International | Ngx Energy vs. Bengal Energy | Ngx Energy vs. ROK Resources | Ngx Energy vs. Pieridae Energy Limited |
| PetroShale vs. Yamaha Motor Co | PetroShale vs. Nitto Denko Corp | PetroShale vs. Farmers Merchants Bancorp | PetroShale vs. Furukawa Electric Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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