Correlation Between New Fortress and Enagás SA
Can any of the company-specific risk be diversified away by investing in both New Fortress and Enagás SA 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 New Fortress and Enagás SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Fortress Energy and Enags SA, you can compare the effects of market volatilities on New Fortress and Enagás SA 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 New Fortress with a short position of Enagás SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Fortress and Enagás SA.
Diversification Opportunities for New Fortress and Enagás SA
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between New and Enagás is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding New Fortress Energy and Enags SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enagás SA and New Fortress 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 New Fortress Energy are associated (or correlated) with Enagás SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enagás SA has no effect on the direction of New Fortress i.e., New Fortress and Enagás SA go up and down completely randomly.
Pair Corralation between New Fortress and Enagás SA
Considering the 90-day investment horizon New Fortress Energy is expected to under-perform the Enagás SA. In addition to that, New Fortress is 1.59 times more volatile than Enags SA. It trades about -0.1 of its total potential returns per unit of risk. Enags SA is currently generating about 0.02 per unit of volatility. If you would invest 1,408 in Enags SA on September 3, 2024 and sell it today you would earn a total of 37.00 from holding Enags SA or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Fortress Energy vs. Enags SA
Performance |
| Timeline |
| New Fortress Energy |
| Enagás SA |
New Fortress and Enagás SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Fortress and Enagás SA
The main advantage of trading using opposite New Fortress and Enagás SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Fortress position performs unexpectedly, Enagás SA 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 Enagás SA will offset losses from the drop in Enagás SA's long position.| New Fortress vs. FLEX LNG | New Fortress vs. Coterra Energy | New Fortress vs. Golar LNG Limited | New Fortress vs. Excelerate Energy |
| Enagás SA vs. NewJersey Resources | Enagás SA vs. Atmos Energy | Enagás SA vs. Brookfield Infrastructure Corp | Enagás SA vs. New Fortress 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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