Correlation Between Natural Gas and Enservco
Can any of the company-specific risk be diversified away by investing in both Natural Gas and Enservco 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 Enservco 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 Enservco Co, you can compare the effects of market volatilities on Natural Gas and Enservco 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 Enservco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Gas and Enservco.
Diversification Opportunities for Natural Gas and Enservco
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Natural and Enservco is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Natural Gas Services and Enservco Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enservco 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 Enservco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enservco has no effect on the direction of Natural Gas i.e., Natural Gas and Enservco go up and down completely randomly.
Pair Corralation between Natural Gas and Enservco
Considering the 90-day investment horizon Natural Gas Services is expected to generate 0.19 times more return on investment than Enservco. However, Natural Gas Services is 5.25 times less risky than Enservco. It trades about 0.45 of its potential returns per unit of risk. Enservco Co is currently generating about -0.5 per unit of risk. If you would invest 1,993 in Natural Gas Services on August 28, 2024 and sell it today you would earn a total of 752.00 from holding Natural Gas Services or generate 37.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 40.91% |
| Values | Daily Returns |
Natural Gas Services vs. Enservco Co
Performance |
| Timeline |
| Natural Gas Services |
| Enservco |
Natural Gas and Enservco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Gas and Enservco
The main advantage of trading using opposite Natural Gas and Enservco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Gas position performs unexpectedly, Enservco 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 Enservco will offset losses from the drop in Enservco's long position.| Natural Gas vs. Enerflex | Natural Gas vs. Forum Energy Technologies | Natural Gas vs. Archrock | Natural Gas vs. Geospace Technologies |
| Enservco vs. Houston American Energy | Enservco vs. Indonesia Energy | Enservco vs. Imperial Petroleum | Enservco vs. Nine Energy Service |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |