Correlation Between One Gas and UGI
Can any of the company-specific risk be diversified away by investing in both One Gas and UGI 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 One Gas and UGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Gas and UGI Corporation, you can compare the effects of market volatilities on One Gas and UGI 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 One Gas with a short position of UGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Gas and UGI.
Diversification Opportunities for One Gas and UGI
Very good diversification
The 3 months correlation between One and UGI is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding One Gas and UGI Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UGI Corporation and One 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 One Gas are associated (or correlated) with UGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UGI Corporation has no effect on the direction of One Gas i.e., One Gas and UGI go up and down completely randomly.
Pair Corralation between One Gas and UGI
Considering the 90-day investment horizon One Gas is expected to generate 2.85 times less return on investment than UGI. But when comparing it to its historical volatility, One Gas is 1.05 times less risky than UGI. It trades about 0.15 of its potential returns per unit of risk. UGI Corporation is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 2,849 in UGI Corporation on November 9, 2024 and sell it today you would earn a total of 352.00 from holding UGI Corporation or generate 12.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
One Gas vs. UGI Corp.
Performance |
| Timeline |
| One Gas |
| UGI Corporation |
One Gas and UGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Gas and UGI
The main advantage of trading using opposite One Gas and UGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Gas position performs unexpectedly, UGI 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 UGI will offset losses from the drop in UGI's long position.| One Gas vs. Northwest Natural Gas | One Gas vs. Chesapeake Utilities | One Gas vs. NewJersey Resources | One Gas vs. RGC Resources |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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