Correlation Between Sidi Kerir and Natural Gas
Can any of the company-specific risk be diversified away by investing in both Sidi Kerir and Natural Gas 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 Sidi Kerir and Natural Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sidi Kerir Petrochemicals and Natural Gas Mining, you can compare the effects of market volatilities on Sidi Kerir and Natural Gas 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 Sidi Kerir with a short position of Natural Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sidi Kerir and Natural Gas.
Diversification Opportunities for Sidi Kerir and Natural Gas
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sidi and Natural is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sidi Kerir Petrochemicals and Natural Gas Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Gas Mining and Sidi Kerir 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 Sidi Kerir Petrochemicals are associated (or correlated) with Natural Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Gas Mining has no effect on the direction of Sidi Kerir i.e., Sidi Kerir and Natural Gas go up and down completely randomly.
Pair Corralation between Sidi Kerir and Natural Gas
Assuming the 90 days trading horizon Sidi Kerir is expected to generate 1.58 times less return on investment than Natural Gas. But when comparing it to its historical volatility, Sidi Kerir Petrochemicals is 1.3 times less risky than Natural Gas. It trades about 0.03 of its potential returns per unit of risk. Natural Gas Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,172 in Natural Gas Mining on December 16, 2024 and sell it today you would earn a total of 866.00 from holding Natural Gas Mining or generate 27.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sidi Kerir Petrochemicals vs. Natural Gas Mining
Performance |
| Timeline |
| Sidi Kerir Petrochemicals |
| Natural Gas Mining |
Sidi Kerir and Natural Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sidi Kerir and Natural Gas
The main advantage of trading using opposite Sidi Kerir and Natural Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sidi Kerir position performs unexpectedly, Natural Gas 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 Natural Gas will offset losses from the drop in Natural Gas' long position.| Sidi Kerir vs. Natural Gas Mining | ||
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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