Correlation Between Natural Gas and CGG SA
Can any of the company-specific risk be diversified away by investing in both Natural Gas and CGG 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 Natural Gas and CGG SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Gas Services and CGG SA ADR, you can compare the effects of market volatilities on Natural Gas and CGG 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 Natural Gas with a short position of CGG SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Gas and CGG SA.
Diversification Opportunities for Natural Gas and CGG SA
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Natural and CGG is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Natural Gas Services and CGG SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CGG SA ADR and Natural Gas 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 Natural Gas Services are associated (or correlated) with CGG SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CGG SA ADR has no effect on the direction of Natural Gas i.e., Natural Gas and CGG SA go up and down completely randomly.
Pair Corralation between Natural Gas and CGG SA
If you would invest 1,443 in Natural Gas Services on September 1, 2024 and sell it today you would earn a total of 1,333 from holding Natural Gas Services or generate 92.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.48% |
| Values | Daily Returns |
Natural Gas Services vs. CGG SA ADR
Performance |
| Timeline |
| Natural Gas Services |
| CGG SA ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Natural Gas and CGG SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Gas and CGG SA
The main advantage of trading using opposite Natural Gas and CGG SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Gas position performs unexpectedly, CGG 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 CGG SA will offset losses from the drop in CGG SA's long position.| Natural Gas vs. Enerflex | Natural Gas vs. Now Inc | Natural Gas vs. Newpark Resources | Natural Gas vs. Bristow Group |
| CGG SA vs. Akastor ASA | CGG SA vs. Greenway Technologies | CGG SA vs. Trican Well Service | CGG SA vs. NCS Multistage Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
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