Correlation Between Naturgy BAN and Bolsas Y
Can any of the company-specific risk be diversified away by investing in both Naturgy BAN and Bolsas Y 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 Bolsas Y 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 Bolsas y Mercados, you can compare the effects of market volatilities on Naturgy BAN and Bolsas Y 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 Bolsas Y. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naturgy BAN and Bolsas Y.
Diversification Opportunities for Naturgy BAN and Bolsas Y
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Naturgy and Bolsas is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Naturgy BAN SA and Bolsas y Mercados in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bolsas y Mercados 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 Bolsas Y. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bolsas y Mercados has no effect on the direction of Naturgy BAN i.e., Naturgy BAN and Bolsas Y go up and down completely randomly.
Pair Corralation between Naturgy BAN and Bolsas Y
Assuming the 90 days trading horizon Naturgy BAN is expected to generate 1.01 times less return on investment than Bolsas Y. In addition to that, Naturgy BAN is 1.21 times more volatile than Bolsas y Mercados. It trades about 0.12 of its total potential returns per unit of risk. Bolsas y Mercados is currently generating about 0.14 per unit of volatility. If you would invest 42,400 in Bolsas y Mercados on October 20, 2024 and sell it today you would earn a total of 3,900 from holding Bolsas y Mercados or generate 9.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Naturgy BAN SA vs. Bolsas y Mercados
Performance |
| Timeline |
| Naturgy BAN SA |
| Bolsas y Mercados |
Naturgy BAN and Bolsas Y Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naturgy BAN and Bolsas Y
The main advantage of trading using opposite Naturgy BAN and Bolsas Y positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naturgy BAN position performs unexpectedly, Bolsas Y 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 Bolsas Y will offset losses from the drop in Bolsas Y's long position.| Naturgy BAN vs. Transportadora de Gas | Naturgy BAN vs. Distribuidora de Gas | Naturgy BAN vs. Walmart | Naturgy BAN vs. Central Puerto SA |
| Bolsas Y vs. Walmart | Bolsas Y vs. Ledesma SAAI | Bolsas Y vs. BBVA Banco Frances | Bolsas Y vs. Transportadora de Gas |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |