Correlation Between Koil Energy and Natural Gas
Can any of the company-specific risk be diversified away by investing in both Koil Energy and Natural 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 Koil Energy and Natural Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Koil Energy Solutions and Natural Gas Services, you can compare the effects of market volatilities on Koil Energy and Natural 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 Koil Energy with a short position of Natural Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Koil Energy and Natural Gas.
Diversification Opportunities for Koil Energy and Natural Gas
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Koil and Natural is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Koil Energy Solutions and Natural Gas Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Gas Services and Koil 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 Koil Energy Solutions are associated (or correlated) with Natural Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Gas Services has no effect on the direction of Koil Energy i.e., Koil Energy and Natural Gas go up and down completely randomly.
Pair Corralation between Koil Energy and Natural Gas
Given the investment horizon of 90 days Koil Energy is expected to generate 1.37 times less return on investment than Natural Gas. In addition to that, Koil Energy is 1.86 times more volatile than Natural Gas Services. It trades about 0.21 of its total potential returns per unit of risk. Natural Gas Services is currently generating about 0.55 per unit of volatility. If you would invest 1,990 in Natural Gas Services on September 4, 2024 and sell it today you would earn a total of 802.00 from holding Natural Gas Services or generate 40.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Koil Energy Solutions vs. Natural Gas Services
Performance |
| Timeline |
| Koil Energy Solutions |
| Natural Gas Services |
Koil Energy and Natural Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Koil Energy and Natural Gas
The main advantage of trading using opposite Koil Energy and Natural Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Koil Energy position performs unexpectedly, Natural 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 Natural Gas will offset losses from the drop in Natural Gas' long position.| Koil Energy vs. Expro Group Holdings | Koil Energy vs. ChampionX | Koil Energy vs. Ranger Energy Services | Koil Energy vs. Cactus Inc |
| Natural Gas vs. Enerflex | Natural Gas vs. Forum Energy Technologies | Natural Gas vs. Archrock | Natural Gas vs. Geospace Technologies |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Stocks Directory Find actively traded stocks across global markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |