Correlation Between Naturgy BAN and Agrometal SAI
Can any of the company-specific risk be diversified away by investing in both Naturgy BAN and Agrometal SAI 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 BAN and Agrometal SAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naturgy BAN SA and Agrometal SAI, you can compare the effects of market volatilities on Naturgy BAN and Agrometal SAI 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 BAN with a short position of Agrometal SAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naturgy BAN and Agrometal SAI.
Diversification Opportunities for Naturgy BAN and Agrometal SAI
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Naturgy and Agrometal is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Naturgy BAN SA and Agrometal SAI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agrometal SAI and Naturgy BAN 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 BAN SA are associated (or correlated) with Agrometal SAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agrometal SAI has no effect on the direction of Naturgy BAN i.e., Naturgy BAN and Agrometal SAI go up and down completely randomly.
Pair Corralation between Naturgy BAN and Agrometal SAI
Assuming the 90 days trading horizon Naturgy BAN SA is expected to generate 1.67 times more return on investment than Agrometal SAI. However, Naturgy BAN is 1.67 times more volatile than Agrometal SAI. It trades about 0.28 of its potential returns per unit of risk. Agrometal SAI is currently generating about -0.29 per unit of risk. If you would invest 220,500 in Naturgy BAN SA on October 24, 2024 and sell it today you would earn a total of 54,000 from holding Naturgy BAN SA or generate 24.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naturgy BAN SA vs. Agrometal SAI
Performance |
| Timeline |
| Naturgy BAN SA |
| Agrometal SAI |
Naturgy BAN and Agrometal SAI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naturgy BAN and Agrometal SAI
The main advantage of trading using opposite Naturgy BAN and Agrometal SAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naturgy BAN position performs unexpectedly, Agrometal SAI 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 Agrometal SAI will offset losses from the drop in Agrometal SAI's long position.| Naturgy BAN vs. Transportadora de Gas | Naturgy BAN vs. Cablevision Holding SA | Naturgy BAN vs. Ledesma SAAI |
| Agrometal SAI vs. Transportadora de Gas | Agrometal SAI vs. Harmony Gold Mining | Agrometal SAI vs. United States Steel | Agrometal SAI vs. Compania de Transporte |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |