Correlation Between NRG Energy and Jutal Offshore
Can any of the company-specific risk be diversified away by investing in both NRG Energy and Jutal Offshore 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 NRG Energy and Jutal Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NRG Energy and Jutal Offshore Oil, you can compare the effects of market volatilities on NRG Energy and Jutal Offshore 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 NRG Energy with a short position of Jutal Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of NRG Energy and Jutal Offshore.
Diversification Opportunities for NRG Energy and Jutal Offshore
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NRG and Jutal is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding NRG Energy and Jutal Offshore Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jutal Offshore Oil and NRG 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 NRG Energy are associated (or correlated) with Jutal Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jutal Offshore Oil has no effect on the direction of NRG Energy i.e., NRG Energy and Jutal Offshore go up and down completely randomly.
Pair Corralation between NRG Energy and Jutal Offshore
If you would invest 9,069 in NRG Energy on August 29, 2024 and sell it today you would earn a total of 1,047 from holding NRG Energy or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.67% |
| Values | Daily Returns |
NRG Energy vs. Jutal Offshore Oil
Performance |
| Timeline |
| NRG Energy |
| Jutal Offshore Oil |
NRG Energy and Jutal Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NRG Energy and Jutal Offshore
The main advantage of trading using opposite NRG Energy and Jutal Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NRG Energy position performs unexpectedly, Jutal Offshore 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 Jutal Offshore will offset losses from the drop in Jutal Offshore's long position.| NRG Energy vs. TransAlta Corp | NRG Energy vs. Pampa Energia SA | NRG Energy vs. AGL Energy | NRG Energy vs. Vistra Energy Corp |
| Jutal Offshore vs. Expro Group Holdings | Jutal Offshore vs. ChampionX | Jutal Offshore vs. Ranger Energy Services | Jutal Offshore vs. Cactus Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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