Correlation Between NewJersey Resources and Enagas SA
Can any of the company-specific risk be diversified away by investing in both NewJersey Resources and Enagas 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 NewJersey Resources and Enagas SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewJersey Resources and Enagas SA, you can compare the effects of market volatilities on NewJersey Resources and Enagas 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 NewJersey Resources with a short position of Enagas SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewJersey Resources and Enagas SA.
Diversification Opportunities for NewJersey Resources and Enagas SA
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NewJersey and Enagas is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding NewJersey Resources and Enagas SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enagas SA and NewJersey Resources 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 NewJersey Resources are associated (or correlated) with Enagas SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enagas SA has no effect on the direction of NewJersey Resources i.e., NewJersey Resources and Enagas SA go up and down completely randomly.
Pair Corralation between NewJersey Resources and Enagas SA
Considering the 90-day investment horizon NewJersey Resources is expected to generate 1.08 times more return on investment than Enagas SA. However, NewJersey Resources is 1.08 times more volatile than Enagas SA. It trades about 0.43 of its potential returns per unit of risk. Enagas SA is currently generating about -0.36 per unit of risk. If you would invest 4,639 in NewJersey Resources on August 27, 2024 and sell it today you would earn a total of 511.00 from holding NewJersey Resources or generate 11.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewJersey Resources vs. Enagas SA
Performance |
| Timeline |
| NewJersey Resources |
| Enagas SA |
NewJersey Resources and Enagas SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewJersey Resources and Enagas SA
The main advantage of trading using opposite NewJersey Resources and Enagas SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewJersey Resources position performs unexpectedly, Enagas 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 Enagas SA will offset losses from the drop in Enagas SA's long position.| NewJersey Resources vs. Atmos Energy | NewJersey Resources vs. UGI Corporation | NewJersey Resources vs. Chesapeake Utilities | NewJersey Resources vs. Spire Inc |
| Enagas SA vs. NewJersey Resources | Enagas SA vs. Atmos Energy | Enagas SA vs. UGI Corporation | Enagas SA vs. Chesapeake Utilities |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |