Correlation Between OppFi and Naturgy Energy
Can any of the company-specific risk be diversified away by investing in both OppFi and Naturgy Energy 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 OppFi and Naturgy Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OppFi Inc and Naturgy Energy Group, you can compare the effects of market volatilities on OppFi and Naturgy Energy 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 OppFi with a short position of Naturgy Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of OppFi and Naturgy Energy.
Diversification Opportunities for OppFi and Naturgy Energy
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between OppFi and Naturgy is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding OppFi Inc and Naturgy Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturgy Energy Group and OppFi 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 OppFi Inc are associated (or correlated) with Naturgy Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturgy Energy Group has no effect on the direction of OppFi i.e., OppFi and Naturgy Energy go up and down completely randomly.
Pair Corralation between OppFi and Naturgy Energy
Given the investment horizon of 90 days OppFi Inc is expected to generate 3.97 times more return on investment than Naturgy Energy. However, OppFi is 3.97 times more volatile than Naturgy Energy Group. It trades about 0.33 of its potential returns per unit of risk. Naturgy Energy Group is currently generating about -0.11 per unit of risk. If you would invest 539.00 in OppFi Inc on August 28, 2024 and sell it today you would earn a total of 246.00 from holding OppFi Inc or generate 45.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
OppFi Inc vs. Naturgy Energy Group
Performance |
| Timeline |
| OppFi Inc |
| Naturgy Energy Group |
OppFi and Naturgy Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OppFi and Naturgy Energy
The main advantage of trading using opposite OppFi and Naturgy Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OppFi position performs unexpectedly, Naturgy Energy 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 Naturgy Energy will offset losses from the drop in Naturgy Energy's long position.The idea behind OppFi Inc and Naturgy Energy Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Naturgy Energy vs. Hong Kong and | Naturgy Energy vs. NewJersey Resources | Naturgy Energy vs. Atmos Energy | Naturgy Energy vs. Brookfield Infrastructure Corp |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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